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UNLEASHING INNOVATION: Excellent Healthcare for

Report of the Advisory Panel on Healthcare Innovation Également disponible en français sous le titre : Libre cours à l’innovation : Soins de santé excellents pour le Canada

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© Her Majesty the Queen in Right of Canada, as represented by the Minister of Health, 2015

Publication date: July 2015

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Pub.: 150048 Cat.: H22-4/9-2015E-PDF ISBN: 978-0-660-02680-0 REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

July 2015

The Honourable Rona Ambrose Minister of Health Ottawa ON

Dear Minister,

Please find attached the final report of the Advisory Panel on Healthcare Innovation.

This report is the product of our consultations with , supplemented by literature reviews, commissioned research, and our own discussions and deliberations.

We were humbled to be asked for advice on a set of issues that affect all our fellow citizens. We have also appreciated both your support throughout our mandate and your respect for our independence.

We hope this report will be useful to you and your Cabinet colleagues, and that our recommendations will galvanize federal strategies and investments that strengthen Canada’s healthcare systems.

David Naylor (Chair) Neil Fraser

Francine Girard (Deputy Chair) Toby Jenkins

Jack Mintz Christine Power

i | Dedication

This report is dedicated to the memory of our fellow panelist, Dr. Cyril B. Frank (1949-2015), healthcare leader and innovator extraordinaire.

Chief Executive Officer of Innovates - Health Solutions, Cy Frank also found time to be Chief Medical Advisor to the Alberta Bone and Joint Health Institute, the McCaig Professor of Joint Injury and Arthritis Research at the University of , and a practising orthopedic surgeon.

Just days before his sudden death, Cy had been in top form on a visit by several panelists and team members to Yellowknife and Whitehorse. The next stop was a full Panel meeting in , where Cy elevated our discussions with his unique combination of vision, common sense, and irrepressible optimism about an excellent future for Canadian healthcare. As fate would have it, Cy’s parting words to us were that Canada should aim to build healthcare systems that were living laboratories, drawing patients and clinicians together in partnership with researchers, entrepreneurs, and innovators from all sectors and disciplines.

We have sorely missed Cy in these last few months of deliberations and writing. However, we remain deeply grateful that the Panel had the opportunity to benefit from Cy Frank’s wisdom and unique perspectives as a relentless healthcare innovator, pioneering clinician-researcher, outstanding teacher, generous colleague, and great friend. REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

Table of Contents

Dedication ...... ii

Acknowledgments ...... v

Foreword ...... vii

Chapter 1. .- .Healthcare .Innovation .in .Canada: .A Prologue ...... 1

Chapter 2. .- .Trending .Down .or .Scaling .Up: .Canada’s .Healthcare .Choice . . . . 9

Chapter 3. .- .The .Evolving .Federal .Role .in .Canadian .Healthcare ...... 23

Chapter 4-. .Breaking .the .Gridlock ...... 35

Chapter 5. -. Patient. Partnership,. .Public .Empowerment ...... 47

Chapter 6. .- .Integration .and .Innovation: .The .Virtuous .Cycle . of .Seamless Care...... 57

Chapter 7. .- .Channeling .the .Data .Deluge, .Mapping . . the Knowledge. .Frontier ...... 69

Chapter 8. .- .Improving .Value .in .Healthcare ...... 83

Chapter 9. .- .Healthcare .and .Economic .Prosperity ...... 97

Chapter 10. .- .Tax Policy. .in .Support .of .Healthcare .System .Change . . . . . 109

Chapter 11. .- .Concluding .Summary ...... 119

Appendix .1: .List . of. .Recommendations ...... 127

Appendix .2: . .Full .List .of .Acknowledgments ...... 135

Appendix .3: .List of. .Commissioned .Research .and .Analysis ...... 142

References ...... 143

| iii UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

iv | REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

Acknowledgments

This report is the culmination of thousands of hours of The Panel wishes to especially acknowledge the generosity engagement, consultation, research, and deliberation, made of those who voluntarily gave their time to participate in possible only by the efforts of many. To these individuals the Panel’s endeavours. In particular, the Panel is indebted and organizations, the Panel would like to express its to many individuals who provided expert advice and critical gratitude. In doing so, the Panel members must emphasize assistance in the organization of roundtables, special that they alone bear final responsibility for what is presented sessions, and site visits, undertaking customized analyses, in their report. In particular, elected and appointed officials and otherwise moving the Panel’s agenda forward. A of the federal, provincial and territorial governments should special nod must go to: Phillip Bazel of the University of not be assumed to have endorsed or approved any of the Calgary’s School of Public Policy, Alan Bernstein of the views, interpretations or recommendations contained in Canadian Institute for Advanced Research, Meghan Baker this document. and Alison Bourgon of the Canadian Institutes of Health Research, Ryan Galloway of the Center for and First and foremost, the Panel wishes to thank the individuals Medicaid Innovation, Jean-Louis Denis of the École from the Healthcare Innovation Secretariat who provided nationale d’administration publique, Zayna Khayat of exceptional support to the Panel and its members. Marcel MaRS, Erik Landriault of the Royal Danish Consulate Saulnier, as Executive Secretary to the Panel, was both a General (), Andrew Macleod of the Change fount of knowledge and the key departmental liaison with Foundation, the Hon. and staff of the Canadian . David Clements was the Executive Director Council of Chief Executives, Angela Morin, Sonia Isaac- for the Healthcare Innovation Secretariat, with overall Mann and Erin Tomkins of the Assembly of , responsibility for research, consultation and other activities. Pierre-Gerlier Forest of the Johns Hopkins Bloomberg His extensive knowledge of the health sphere and expertise School of Public Health and Jeremy Veillard of the Canadian in indicators and information systems were invaluable. The Institute for Health Information. Additionally the Panel Panel further wishes to highlight and acknowledge Peggy would like to express its deep appreciation to the hundreds Ainslie for her exceptional leadership, many insights, and of individuals who took the time to attend these events tireless effort over the course of the Panel’s mandate. ‘The and contributed valuable perspectives. For a comprehensive Trio’ as they came to be called, proved every day that three list of organizers and attendees, please see appendix 2. heads are better than two, let alone one. Panel members also had ample occasion to appreciate the talent and Mary Pat MacKinnon and staff at Ascentum Inc. helped dedication of the entire secretariat staff – Joanne Desormeaux, to coordinate and effectively facilitated regional stakeholder Andrea Lecomte, Salimah Maherali, Leslie Meerburg, consultation sessions across the country. As well, a number Karin Phillips, Kajan Ratneswaran, and Stephanie Soo – all of individuals and organizations conducted commissioned of whom made indispensable contributions in administrative research and facilitated engagement activities on the Panel’s and strategic coordination, research, writing, analysis, and behalf, including G. Ross Baker of the University of Toronto, communications. In sum, while Panel members are content J.C. Herbert Emery of the University of Calgary, David to be held accountable for anything in the report that makes Flaherty of David H. Flaherty Inc., Diane Gagnon of the anyone unhappy, they would ask that happy readers give University of Ottawa, Don Husereau of the Institute of due credit to the remarkable team listed above. , Karine Guertin of the University of , Maria Judd of the Canadian Foundation of Many senior provincial and territorial health officials lent Healthcare Improvement, Sharif Mahdy of the Students their time and counsel to the Panel, including Ministers Commission, Anne Snowdon of the Ivey Centre on Health Glen Abernethy, Gaétan Barrette, Dustin Duncan, Eric Innovation at Western University, John Sproule of the Hoskins, Steve Kent, Mike Nixon, and Fred Horne; and Institute of Health Economics, Terrence Sullivan of Terrence Deputy Ministers Bob Bell, Stephen Brown, Bruce Cooper, Sullivan and Associates, and Jason Sutherland of the Janet Davidson, Debbie DeLancey, Max Hendricks, Karen University of . The Panel appreciates the Herd, Tom Maston, Michael Mayne, Patricia Meade, Colleen excellent work of all the aforementioned individuals, Stockley, and Peter Vaughan; as well as their respective organizations, and enterprises. staff, who facilitated and participated in visits, regional meetings, and stakeholder consultation events.

v | UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Finally, the Panel would like to thank the hundreds of stakeholder organizations and members of the public who took the time to provide thoughtful and considered written input as part of the Panel’s online consultations. For a full list of individuals and organizations who contributed to the Panel’s work, please see the appendices to the report.

vi | REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

Foreword

The Advisory Panel on Healthcare Innovation has been territories, but also for the federal government in its role learning and deliberating more or less non-stop since as a provider of care to specific populations. Regarding members received their mandate from federal healthcare, we did not comment specifically on Rona Ambrose in June 2014. We have had an active military personnel and veterans, or prisoners in extraordinary experience. federal penitentiaries. However, we do comment on the federal role in First Nations and health services. Panel members have read scores of submissions and commissioned research reports, dug through mountains In contrast, we made a commitment to provincial and of publications, crisscrossed Canada for consultations territorial health ministers that the Panel would praise with hundreds of our fellow citizens, and conversed specifically while criticizing generically. We kept our word. with many federal, provincial and territorial leaders, This approach reflects not just attention to political as well as international experts who work in the broad sensitivities, but two obvious facts and a fundamental health arena. belief. The facts are that healthcare reform in Canada has proven extraordinarily difficult for every jurisdiction, with We came at this task from different disciplines, sectors, the result that, despite varied circumstances and unique and regions. Collectively, including the late Cy Frank, we strengths, Canada’s healthcare systems today share many can claim well over 150 years of engagement with Canadian weaknesses and challenges. The belief is one that shaped healthcare systems, along with substantial expertise in the Panel’s key recommendations: all Canadian governments public policy and governance. However, preparing this – and all Canadians – would benefit from a stronger culture report was a serious challenge, simply because so many of inter-jurisdictional collaboration in healthcare. issues might reasonably be included under the broad rubric of healthcare innovation. To that end, many of our recommendations anticipate that some or all provincial and territorial governments may In this regard, it seems worth highlighting and explaining choose to begin new collaborative initiatives with each a few things that the Panel did and did not do. other and the federal government. In this regard, however, the language is precise. The report recommends priorities Our terms of reference specified that our recommendations for federal support and action, and delineates a new should fall within the – and they do. incentive structure that clearly differs from standard transfer payments or past health accords. Each provincial and Our terms of reference further specified that our territorial government accordingly has a choice of working recommendations should respect the division of powers together with the federal government in the interests of in the Canadian Constitution, and therefore focus on the their residents on specific projects – or going its own way. federal government. They do so. Our recommendations are directed to the and in many Readers may notice further consistencies in wording. instances to Health Canada in particular. “Canadian governments” refers to all 14 federal, provincial and territorial administrations. The federal administration At the same time, it would be foolish – indeed, impossible is referred to as “the federal government,” or “the – to write a report on innovation in healthcare without Government of Canada.” General references to “Canada” making general observations about Canadian healthcare and “Canadians” are national, not federal; the accompanying systems and what would make those systems better. The pronouns are “we” (and “our”), except in this Forewordi. observations in the report reflect our estimation of best Otherwise, we have resorted, with a collective grimace, to practices internationally. They also repeatedly align with self-reference as “the Panel” (“Panel’s” or “its”) and “Panel what has been recommended in the past by other members” (“their”) throughout the report. commissions and panels advising, variously, the federal, provincial and territorial governments. As noted above, we should also acknowledge things we did not do. In that respect, throughout this report the terms “Canadian healthcare systems” or “Canada’s healthcare systems” are used inclusively, i.e., not just for the provinces and i The sole exception is a quote from the Foreword at the end of the report.

vii | UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Because our mandate was healthcare and that in itself was Instead, the Panel concluded unanimously that sustainable overwhelming, we did not delve into broad determinants of improvements in healthcare were unlikely ever to occur health or strategies for community-wide health promotion. unless the federal government makes changes to its current However, readers will note that our recommendations point vehicles for pan-Canadian collaboration, along with major strongly towards empowering patients with their own health investments to support provinces and territories in the information, and towards modes of reorganizing healthcare implementation of fundamental changes to their systems. systems to put much greater emphasis on keeping Canadians These funds would flow to ‘coalitions of the willing’ – as healthy as possible, including better integration of healthcare jurisdictions, institutions, providers, patients, industry, and and social services. committed innovators of all backgrounds. Our report presents this concept in detail along with other In various submissions and presentations to the Panel, recommendations designed to unleash innovation in we were pressed to support the creation of new strategies Canada’s healthcare systems. or agencies addressing a range of conditions and population groups. We did not accept those ideas – nor We conclude this brief Foreword with a disclaimer, and did we reject them. With the obvious and, we trust, expressions of both concern and confidence. understandable exception of First Nations and Inuit health services, our focus was on broader capacity building and This report represents our best advice to the Minister of system re-design. Health and the Government of Canada. We understand that not all recommendations may be accepted. However, Under the heading “Fiscal Responsibility,” the Panel’s we caution that, absent federal action and investment, and terms of reference insisted that our recommendations absent political resolve on the part of provinces and should “not result in increasing spending pressure on territories, Canadian healthcare systems are headed for a provincial and territorial budgets.” We have respected this continued slow decline in performance relative to peers. direction. The flow of federal funds and implementation of related strategies in the report do not depend on a full Our consultations also left us in no doubt that Canadians consensus of provinces and territories, nor do they demand hope and expect the federal government will work together new spending by provinces and territories that choose to with provinces and territories to reverse the erosion of the participate. Rather, they anticipate that existing operating nation’s most cherished social program. We do fully dollars can and will be re-aligned to common purpose in understand – and the report elaborates on – the frustrations variously developing, assessing, scaling up, and spreading and failings of conditional fiscal federalism as it has unfolded healthcare innovations. in healthcare over the decades. While its decision was initially controversial, the current federal government gave momentum We were also told that our recommendations “must not to change when it abandoned what had become a imply either an increase or a decrease in the overall level counterproductive fiscal model. of federal funding for current initiatives supporting innovation in healthcare.” Although it was not an easy Thus, much of what we propose is specifically designed decision, we did not follow this guidance. However, we to move Canada toward a different model for federal believe our recommendations are indeed fiscally responsible. engagement in healthcare – one that depends on an ethos of partnership, and on a shared commitment to scale up We have ensured, for example, that our recommendations existing innovations and make fundamental changes in regarding tax policy are revenue neutral. No changes to incentives, culture, accountabilities, and information current transfers are envisaged beyond the reduction in systems. We do not pretend that this model offers an growth rate already slated for implementation by the federal immediate remedy for the ills of Canadian healthcare. government, and no new universal cost-sharing programs However, we have a high degree of confidence that are proposed. Furthermore, as noted above, our approach concerted action on our major recommendations can make departs from past federal-provincial-territorial accords a meaningful difference that will be seen and felt across that sought to ‘buy change’ based on unanimously agreed Canada by 2025. priorities and formulaic allocations of funds.

viii | Chapter 1 Healthcare Innovation in Canada: A Prologue

“It is time to get innovative. Time to change the way we have been thinking and how we have been doing things. It is time to work collaboratively to make the system more responsive to the needs of Canadians. The time is now.”

The Honourable Rona Ambrose, Minister of Health, Canada UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Healthcare Innovation in Canada: A Prologue

On June 24, 2014, the Government of Canada’s health A Structural Snapshot of minister, the Honourable Rona Ambrose, launched the Medicare Advisory Panel on Healthcare Innovation. Her mandate to the Panel was clear: Chapter 3 will say more about the architecture of Canadian healthcare and the federal role in particular. For now, it is • Identify the five most promising areas of innovation worth noting that all Canadian provincesii share some in Canada and internationally that have the potential common elements: to sustainably reduce growth in health spending while leading to improvements in the quality and accessibility • All offer universal access to medically-necessary health of care. services provided in or by . These services are rendered without charge at the point of • Recommend the five ways the federal government service, and coverage is portable across provinces and could support innovation in the areas identified above. territories. At the federal level, these common features are embedded in the Canada Health Act, which requires The creation of the Panel and its mandate reflected what that provincial and territorial plans seems to be an emerging consensus among patients, meet specific criteria in order to receive federal health providers, policymakers, and the general public alike: funding through the . healthcare across Canada, for all its continuing strengths, is a long way from what it should be or could be. • All provinces and territories have widened public coverage beyond and services Debates still take place about how much should be to include home care, long-term care, and drugs spent, and what the private-public balance or federal- dispensed in the community. Access to these provincial/territorial balance should be. However, as additional services is typically targeted to certain regards the publicly-funded systems collectively and segments of the population such as low-income popularly known as Medicare, polling data suggest that families and seniors. These services go beyond the only one out of four Canadians believes that insufficient scope of the Canada Health Act. Thus, what is funding is the main source of problems in healthcare.1 deemed eligible for provincial coverage, and the What seems to be emerging instead is a focus on how extent of such coverage, varies from jurisdiction to the system spends the dollars that already flow into it, jurisdiction and may include co-payments or other along with a sense of unease about what will be left of charges to the patient at the point of service. Medicare for future generations. • Many – but not all – working Canadians and their Meanwhile, across Canada, system leaders are working families have access to private health insurance with providers and patients to make healthcare better. The through their place of work. Private health insurance work of all these innovators is highly laudable and the plans typically cover prescription drugs, single- and Panel in its travels heard first-hand about some of the double-bedded rooms for hospital stays, prescribed bright spots their efforts have created. The Panel also heard medical devices, and ambulatory services provided that, while these pioneers are often celebrated locally, their by other healthcare professionals such as dentists, efforts have only limited impact. Somehow, the structures optometrists, physiotherapists and . and incentives of Canada’s healthcare systems are suboptimal for widespread adoption of positive change. • The result is a “narrow but deep” public insurance structure. All physician and hospital services are This chapter provides an opening overview of the covered under public plans, while other increasingly structure and development of , important goods and professional services are summarizes the Panel’s mandate and its processes for financed through a mix of public and private payment gathering relevant input and evidence, and closes with a preliminary sketch of what panelists have heard, read, ii These descriptors are less applicable for the territories and for the services and seen over the last year. provided under direct federal aegis, but the core principles hold.

2 | CHAPTER 1 — HEALTHCARE INNOVATION IN CANADA: A PROLOGUE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

– with the patient often assuming a significant plan in 1947, and oversaw the legislative approval of burden of the costs. Canada’s first universal medical insurance act in 1961.

• Most physicians are remunerated primarily on a fee- Prime Minister also figures twice. His for-service basis, meaning that they get paid at a government brought in the Hospital Insurance and Diagnostic negotiated rate each time they deliver a service. The Services Act in 1957, offering federal dollars to split the cost same is true for other independent professionals to of the hospital plan and any similar provincial the extent that their services are covered by provincial plan. This injection of funds catalyzed the extension of and territorial health insurance plans. universal hospital coverage to all Canadian provinces and territories. Diefenbaker again took centre stage in 1961 • Most general hospitals are structured as public sector when he appointed Mr. Justice Emmett Hall as chair of organizations or non-profit corporations. All are the Royal Commission on Health Services. The Hall publicly funded via some mix of global (i.e., lump sum) Commission report (1964) set out a blueprint for further budgets, programmatic envelopes, or activity-based federal cost-sharing, starting with medical care insurance, funding. In many provinces, these with the vision of broadening coverage over time to other institutions are linked by common regional governance health services such as dental care for children. That vision, or shared budgeting to other parts of the system (e.g. however, was never to be realized. home care, or institutions such as chronic-care or rehabilitation hospitals). Prime Minister Lester B. Pearson and his cabinet colleagues take the spotlight next in most historical accounts. Pearson’s How did this particular configuration arise? government accepted Hall’s advice, and, with the cost- sharing provisions of the Medical Care Act of 1966, opened the door for all provinces to follow Saskatchewan’s lead Medicare’s Arrested with universal and comprehensive first-dollar coverage of Development medical services. By the end of 1972, all provinces and territories were aboard. Many of the defining features summarized above are legacies of policies formulated in the 1960s or even earlier, In hindsight, barriers to innovation were visible even in and codified in 1984 by the Canada Health Act.iii The basic those heady early days of Medicare. structure of Canadian Medicare is therefore one that is deeply familiar and reassuring to millions of Canadians. For example, in the early 1970s, Canadian researchers Moreover, Canadians from all regions and all walks of life showed that a specially-trained nurse practitioner still value this iconic set of social programs that aimed to collaborating with a family doctor could do 70 percent eliminate financial barriers to healthcare. of the doctor’s work, with no difference in patients’ health outcomes or satisfaction. These landmark findings Perhaps it is understandable, then, that accounts of the were published in 1974 by the New England Journal of developmental history of Medicare in Canada often feature Medicine, but the report concluded on a cautionary note: a cast of heroic figures. takes top billing “Although cost effective from society’s point of view, for two bold steps as premier of Saskatchewan. Douglas the new method of was not financially implemented Canada’s first universal hospital services profitable to doctors because of current restrictions on reimbursement for the nurse-practitioner services.”2 iii Enacted in 1984, the Canada Health Act, RSC, 1985, c. C-6 (CHA) is legislation Indeed, even as nurse practitioners found varied roles that sets out conditions for federal fiscal transfers to provinces and territories across the globe, the spread and scaling-up of the for healthcare. The CHA describes the primary objective of Canadian healthcare policy as follows: “to protect, promote and restore the physical and mental concept was so slow that mothballed its well-being of residents of Canada and to facilitate reasonable access to insured pioneering training programs for several years. health services without financial or other barriers.” To receive the full cash contribution under the Canada Health Transfer, provincial and territorial health insurance plans must fulfill the following conditions: public administration, The warning signs were few, however, and universal publicly comprehensiveness, universality, portability and accessibility. The CHA also funded healthcare was a definite success that set Canada includes provisions to discourage extra-billing and user charges for insured 3 services. These provisions have constrained the emergence of private insurance apart from the US. There, in landmark 1965 legislation, or private delivery of “medically necessary” services as broadly defined by the two steps toward wider public insurance were taken. Act. However, the CHA does not say anything about how provinces and territories should organize, manage and deliver healthcare services. Medicare was implemented federally as a direct payment

CHAPTER 1 — HEALTHCARE INNOVATION IN CANADA: A PROLOGUE | 3 UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

program for seniors’ care and, through Medicaid, a 1960 health services is very poorly integrated. The theme of cost-sharing plan for states was extended to cover health improved integration of care will recur throughout this services for citizens in receipt of social assistance. report and needs only a brief introduction here.

These “Great Society” programs left the coverage of the As one example of poor integration, physicians and majority of Americans to the private market, and tens of hospitals are funded through separate budgets in Canadian millions remained uninsured while the costs of care healthcare systems. This makes little sense for the majority skyrocketed. As the healthcare travails of our great of specialists, given the substantial influence they have neighbour intensified in the 1970s and 1980s, Canadians over hospital expenditures. Indeed, under the current fee- placed an increasingly high value on our more equitable for-service payment system, most of these superbly-trained and efficient model of coverage. This emphasis on US professionals have no specific financial rewards for quality comparisons still figures prominently in Canadian of care or responsible stewardship of scarce healthcare healthcare discourse, but was misplaced from the outset. resources.

Canada’s move to universal coverage for hospital and The lack of integration of healthcare services also reinforces physician services actually occurred at a slower pace than Canada’s narrow scope of public coverage, and vice versa. in many other nations. While Canadians basked in the Provinces and territories are justifiably uneasy about the sunshine of praise from US academics bemoaning the cost implications of adding on more budgetary silos to pay flaws in their own healthcare system, European and UK other professionals for needed care or to assume full researchers were already far down the road, examining financial responsibility for covering pharmaceuticals, even the worrisome disparities in health status that persisted though careful spending on these goods and services could across socioeconomic strata even decades after universal more than offset other costs in fully integrated budgets. coverage had become a reality.4 Meanwhile, consider the fate of a fellow Canadian badly Of course, Canadians did and still can take pride in the injured in a motor vehicle accident. He or she could well much lower average cost per capita of health services here need acute in-patient care, the services of physicians as compared to the US. However, even this comparison working in many specialties, rehabilitation hospital care, may be somewhat misleading. Our spending per capita home care, outpatient physical and occupational therapy, today is higher than a number of other nations that have drugs, dental services, psychological counselling, and equal or better performance in a range of healthcare assistive devices. The current reality across Canada is that measures,5 as Chapter 2 will discuss in some detail. care for this citizen would involve tapping into a dozen separate private and public programs, with varying degrees This trend is clearly not attributable to a lack of talent. of coverage and incomplete sharing of clinical information Canada has no shortage of innovative healthcare thinkers, across programs, institutions, and providers. Such a world-class health researchers, capable executives, or patchwork can hardly operate in the best interests of the dynamic entrepreneurs who see opportunity in the health patient and his or her family. sphere. Our health professionals and executives are also among the best educated and most skilled in the world. It is true that on a per capita basis, Canada’s ratios of active Advisory Panel Mandate and nurses and doctors are lower than many OECD nations. Definitions However, the numbers of doctors and nurses are rising steadily6,7 – and distribution across the country, particularly Just as Canadians’ views of their healthcare systems appear to rural and remote areas, is arguably the main issue. to be shifting, so also are healthcare policymakers and leaders across the provinces and territories showing an If one accepts that the solution does not lie in more unprecedented level of resolve to make changes. In or more or better talent, what is holding Canada back? launching the Advisory Panel on Healthcare Innovation, the Honourable Rona Ambrose acknowledged the actions One observation that has been made repeatedly is that taken by provinces and territories to slow the growth of Canada’s approach to the finance and organization of healthcare spending and their efforts, individually and

4 | CHAPTER 1 — HEALTHCARE INNOVATION IN CANADA: A PROLOGUE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

collectively, to innovate in healthcare delivery. The new genomic concepts or precision medicine should be Minister added: introduced safely, effectively and efficiently into Canada’s healthcare systems. Social and policy innovation anchored As jurisdictions accelerate their efforts to transform the other, e.g. new ways for professionals to work together, their healthcare systems to achieve the ‘triple aim’ of new ways of engaging patients, and new ways of financing improving patient care and health outcomes while and organizing health services. reducing costs, it is time to take stock of where progress has been made in Canada and around the world. This Minister Ambrose recognized the potentially daunting is essential if we are to accelerate the pace of healthcare scope of the Panel’s remit, not least on an eleven-month innovation and ensure the long-term sustainability of timeline. The Minister eliminated one area of contention Canada’s healthcare system.8 by specifying that the Canada Health Act should govern all its recommendations. As noted above, she also narrowed Before elaborating on the Panel’s mandate, some definitions the Panel’s task to delineating five priority areas for seem in order. innovation and a handful of recommendations to the federal government on how to support innovation in each Innovation has become a buzzword with varied meanings. of those areas. Throughout its consultations, for example, the Panel noted persistent confusion between research and innovation in For its part, the Panel was privileged to receive input from the health sphere. As research becomes more applied, the hundreds of interested individuals and scores of findings may lend themselves to faster uptake and wider organizations. Their submissions and suggestions pointed adoption. But as the case of the nurse practitioner out the merits of a wide variety of innovation themes and illustrates, even practical and definitive findings do not related actions. In this report, consistent with its mandate, spark widespread innovation in the absence of winning the Panel focuses on the five major areas of innovation conditions in the healthcare system. The frustrating reality that appeared most likely to make Canadian healthcare is that many excellent ideas or inventions are never more effective and sustainable. The report also recommends translated into saleable or scalable innovations. a number of strategies for enabling the relevant changes in healthcare, some specific, and some cross-cutting. What, then, is innovation? A brief but broad definition was offered by the Council of Canadian Academies in their 2009 report on innovation: “new or better ways of Panel Consultations and doing valued things.”9 The Conference Board of Canada Commissioned Research is more specific, defining innovation “as the process through which economic and social value is extracted As suggested above, the members of the Advisory Panel from knowledge through the generation, development, are indebted to a very large number of individuals who and implementation of ideas to produce new or improved shared their insights, concerns, and ideas with Panel strategies, capabilities, products, services, or processes.”10 members. Appendices to this report provide detailed lists For healthcare innovation, the definition used by the Panel of submissions and attendees at various meetings. For in its consultations included the concept of activities that now, a brief summary will suffice. “generate value in terms of quality and safety of care, administrative efficiency, the patient experience, and Over the course of the last year, the Panel heard from a patient outcomes.”11 great many groups and individuals, both in person and online. Some 180 stakeholders, including all the largest These varied definitions underscore that innovation in provider associations, made formal submissions, and about healthcare should not be confused with invention in general 260 members of the public responded online to a general or the creation of new technologies in particular. Innovation call for commentary. To draw in younger voices, the Panel is instead an activity defined more by intent – the creation of asked the Students Commission of Canada to conduct economic and social value – than by form or process. youth engagement activities, including two webinars and a number of interviews. These definitions also meant that the Panel’s mandate covered a wide spectrum of activities. Technological The Panel held in-person consultation sessions in , innovation anchored one end, e.g. consideration of how Edmonton, Regina, Winnipeg, Toronto, Ottawa, and Halifax.

CHAPTER 1 — HEALTHCARE INNOVATION IN CANADA: A PROLOGUE | 5 UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

At those sessions, Panel members met with stakeholders facilitated a meeting of panelists with senior leaders of from across the healthcare spectrum – policymakers, providers, major industries with a special interest or stake in researchers, industry leaders, patients, and innovators. healthcare. An Industry-Government Collaboration Members supplemented their consultations with focused roundtable was organized by the Institute of Health visits to the , , , New Economics, and attended by senior representatives from Brunswick, and Newfoundland. The Panel’s Deputy Chair industry and the public sector, including several also convened roundtable meetings with academics/ entrepreneurs. As well, a roundtable was organized to stakeholders in Montreal. obtain patient, family and caregiver perspectives on healthcare innovation. This valuable meeting was On their travels, Panel representatives met individually facilitated by the Canadian Foundation for Healthcare and/or collectively with high-level officials from every Improvement and the Change Foundation. province and territory in various venues. This collaborative approach was established from the outset. Within In the Washington, D.C. area, the Panel visited approximately a month of the Panel launch, the Chair experts at Johns Hopkins University, the Commonwealth spoke with provincial and territorial Health Ministers by Fund, the Center for Medicare and Medicaid Innovation, teleconference and met with federal, provincial and the Agency for Healthcare Research and Quality, and the territorial Deputy Ministers. The Chair also met with Brookings Institution. To better understand high- Ministers and Deputy Ministers at the annual Federal, performing health systems, the Panel also convened a Provincial and Territorial Health Ministers Conference in summit with leading experts from the Netherlands, the October 2014. UK, the US (Kaiser Permanente), Denmark and Australia. Deputy Ministers of Health from across Canada joined In like fashion, the Panel Chair and Executive Director met panelists and secretariat staff for this very informative day with the Assembly of First Nations’ (AFN) National First of presentations and discussion. Nations Health Technicians Network. Panel members also met with the Vice President of Nunavut Tunngavik Inc. As well, the Panel commissioned original research on (while in Nunavut), heard from First Nations stakeholders number of topics. These include: in Whitehorse and Yellowknife, and met with representatives from the First Nations and Inuit Health Branch at Health • A survey of federal, provincial and territorial healthcare Canada to learn about the unique challenges faced by innovation support Aboriginal communities. • The effect of different types of innovation on At its regular meetings, the Panel received presentations expenditure growth from the Canadian Institutes of Health Research (CIHR), with a special emphasis on the Strategy for Patient- • Implications of privacy regulations for electronic health Oriented Research, as well as several Pan-Canadian records and patient portals healthcare agencies: the Canadian Institute for Healthcare Information, Canada Health Infoway, the Canadian Patient • Tax credits for non-insured healthcare services and Safety Institute, the Canadian Foundation for Healthcare tax-assisted healthcare savings plans Improvement, the Canadian Agency for Drugs and Technologies in Health, the Commission • Bundled payments for health services of Canada, and the Canadian Partnership Against . • Trends and potential impact of more patient-centred The Panel also held targeted consultations with key care stakeholders on specific issues of interest. CIHR facilitated a Best Brains Exchange on the topic of personalized and • Cross-Canada survey of provincial and territorial precision medicine. Attendees included leading Canadian informants to capture flagship innovations researchers and entrepreneurs in the field. Panel members participated in a tax policy roundtable with economic A full list of research report titles and authors can be found experts and health industry leaders organized under the in appendix 3. auspices of the University of Calgary’s School of Public Policy. The Canadian Council of Chief Executives

6 | CHAPTER 1 — HEALTHCARE INNOVATION IN CANADA: A PROLOGUE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

What the Panel Heard and Read: Here is a partial list: A Tasting Menu • Movement is being made to integrate services and From the foregoing, it will be evident that the input and budgets around patients, but far more work needs to advice offered to the Panel was remarkable in breadth and be done to continue breaking down the silos that depth. The commentary and analysis also contained a impede the achievement of patient-centred care. striking blend of negative and positive elements. • Non-physician scopes of practice are evolving and On the negative side, Panel members heard about the expanding throughout Canada, but wide variation frustration of many stakeholders. exists across the country. Canada should emulate jurisdictions like Australia and the Netherlands that Patients told us about limited access to a variety of services. have promoted greater role flexibility on a national They lamented the barriers that were still consistently level and thereby enabled the emergence of stronger being erected to keep them from accessing their own health multi-professional teams. records, and noted their advice is neither sought nor taken seriously as regards improvement in the delivery of care. • Canada’s health info-structure has come a long way They also observed that the narrow scope of Medicare led over the past decade, but we also started a very long to large out-of-pocket expenses for many Canadians, way behind peer nations. Now the time has come to particularly those without work-related private health accelerate and catch up with nations such as Denmark insurance plans. and others that have deployed health information and communications technology to improve care and Decision-makers and administrators complained of policy contain costs. and managerial gridlock, confiding on occasion that attempts at reform in the public interest were sometimes • With Canada’s huge landmass and thin population co-opted to the short-term benefit of providers or density, as well as our longstanding commitment to politicians. Policy experts emphasized the clumsiness of telehealth, Canada should lead the world in mobile the current fee-for-service mode of remunerating physicians, health and virtual care. and asked why Canada had failed to adopt integrated delivery subsystems, exemplified by leading American • Canada’s physicians have made huge contributions group health plans. Professionals highlighted the ways to healthcare, but the current mode of organizing and that cumbersome regulations and perverse incentives were funding healthcare is holding them back from a larger stifling their creativity and ability to play a bigger role in leadership role. Canada’s healthcare systems. • The US, like Canada, is struggling to scale up Canadians working at all levels of healthcare observed that healthcare innovation. However, tremendous innovations of proven worth were not being scaled up and creativity has been unleashed by ‘Obamacare’ spread across the nation. For their part, entrepreneurs asked payment reforms that offer multi-provider incentives why it was harder to penetrate the Canadian healthcare based on both quality and efficiency of care. Only a market than to sell their ideas, products, and services abroad. few provinces have made small steps towards this While the Panel did hear complaints about the levels of type of “bundled payment” for services. Canada needs funding available for healthcare, a surprising number of to get moving much faster with funding reforms. stakeholders echoed the growing public sentiment that a lack of operating dollars was not the primary problem. • Given its continued challenges, the US system as a whole was not held up as a model; however, leading On the positive side, as already indicated, there was an organizations and best practices within it were extraordinary consistency of resolve that real change in repeatedly singled out. For example, stakeholders healthcare was greatly overdue. Front-line healthcare urged Canada to learn from Intermountain leaders, policymakers, and other stakeholders across the Healthcare’s approach to efficient processes of care, country were utterly consistent in this regard. While no and Kaiser Permanente’s strong orientation to multi- one offered up a simple recipe for an excellent healthcare professional primary care teams and successful , many themes recurred. promotion strategies.

CHAPTER 1 — HEALTHCARE INNOVATION IN CANADA: A PROLOGUE | 7 UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Many other opportunities for improvement were flagged, • The third was that Canada’s national government of course. But so too were threats to the stability and return to the table and help galvanize a consensus – or sustainability of Canada’s healthcare systems. Calling for at least coalitions of willing jurisdictions – around Canada to put its healthcare house in order, stakeholders elements of the structural reforms that many provinces foresaw that our varied healthcare systems would be and territories are currently attempting to advance. buffeted by forces such as demographic pressures, the To be clear, this was not a call for Ottawa to over-step advent of precision medicine and mobile health constitutional boundaries, or to posture in loco parentis. applications, consumer demands for participation in The provinces and territories carefully highlighted to decisions about their healthcare, and societal expectations the Panel the varied ways in which they are already of greater transparency. working together.

While stakeholders expressed concerns and called for That said, capacity to drive reform varies across jurisdictions. reforms, they also urged that the Panel refrain from drive- Ottawa itself has a larger direct healthcare delivery budget by criticism of the efforts of specific institutions or regions. than several provinces and territories. The federal Instead, what they most commonly asked of the Panel government has jurisdiction over certain matters that bear were three things: on health and healthcare innovation, not least research and development. Furthermore, effective in 2017-18, • The first was recognition of local and regional successes Ottawa has changed the formula for the escalator on its in improving healthcare, together with mechanisms health transfers to provinces and territories. Instead of to ensure wider adoption of such innovations. The rising six percent per annum, transfers will grow at the Panel has been delighted to showcase in these pages rate of GDP expansion or at three percent, whichever is what is only a very small sampling of the creativity of higher. While this move provides an important signal of Canadians working in the healthcare realm. The Panel fiscal discipline, it also reduces the financial flexibility of also proposes a major new mechanism to accelerate all provinces and territories to implement reforms. the evaluation and scaling-up of the innovative ideas of their fellow citizens. To all these points in favour of a renewed federal investment and new federal role, the Panel members would respectfully • The second was a renewed federal, provincial and add the following: We are all Canadians. Our nation has territorial partnership, ideally catalyzed by a new made a commitment to universal healthcare, and it is national innovation fund that would be distinct from entirely reasonable to expect our national government to the usual federal transfers. Panel members struggled play a major and facilitative role in strengthening Canadians’ to reconcile this request with federal fiscal constraints. confidence in their healthcare systems. More importantly, As will become clear, their final and considered advice Canadian patients and taxpayers have every right to ask is that, without such a catalytic investment by the that all levels of government collaborate fully in restoring federal government, fiscal pressures on all Canada’s Canada to the international leadership position in healthcare systems will mount and become very healthcare that this country once proudly held. difficult to manage. Either jurisdictions will do less of the same, with adverse impacts on quality and accessibility, or there will be escalating tensions around the ever-contentious elements of fiscal federalism.

8 | CHAPTER 1 — HEALTHCARE INNOVATION IN CANADA: A PROLOGUE Chapter 2 Trending Down or Scaling Up: Canada’s Healthcare Choice

“Processes of scaling up are constrained by structures and cultures, and vested interests that are embedded at the system level.”12

Dirk Essink

“I have witnessed countless cases of healthcare providers knowing what should be done, but having no way to make it happen from their position.”

Public Submission UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Trending Down or Scaling Up: Canada’s Healthcare Choice

As summarized in Chapter 1, Canadians have long Perspectives on the Performance considered Medicare to be one of our nation’s crowning of Canada’s Healthcare Systems achievements. It may be a purely continental conceit, but Medicare resonates for us as a statement of our values and Some caveats are in order before commencing this brief our national identity. However, if the pollsters have it review of a number of performance measures. right, around 50 percent of the population thinks the system is currently “in crisis.” Moreover, various third-party Rankings and league tables of all types appeal to the public reports have suggested that, compared to Organisation and the media for a simple reason: they take that which for Economic Co-operation and Development (OECD) is complex and abstract and render it accessible and peers, Canada’s healthcare systems on average are losing understandable. By design, they carry risks of over- ground.13,14 The Panel accordingly was very interested in simplification. These rankings can also be misleading for understanding just how Canada’s healthcare systems other reasons. In that respect, healthcare leaders and measured up. providers justifiably worry whether data are being interpreted correctly, whether the indicators are the right If, as will become clear, Canadian healthcare systems are ones, or whether there is gaming of the numbers. lagging, then several issues logically arise, and are also Administrators and policy-makers fuss, too, about untoward addressed in this chapter. side-effects – the phenomenon that “what matters is what’s measured,” not least what gets reported in the media. First, is there a ‘model’ system that we might choose from More generally, comparing health systems gives new life among the higher-performing systems? As it turns out, to time-worn clichés about comparing apples and oranges.15 there is not. That simple fact puts an even greater premium on learning about grass-roots or bottom-up innovation in All that said, the Panel sees an unsettling convergence of Canadian healthcare. findings in the results below.

This chapter therefore turns to a tiny sampling of the front-line innovations that Panel members variously saw Health Spending first-hand, or read or heard about in their consultations.iv This sampling is intended only to give readers a sense of Since the 1970s, distinct spending trends have been the creative energy in Canadian healthcare, and reinforces observed not only in Canada, but across all industrialized the relevance of the final issue. nations in the OECD. All nations have experienced rates of increase in the cost of healthcare that have outpaced If, as seems to be the general view, these varied innovations the rate of economic growth. In Canada, a sharp upward are not spreading or scaling up across Canada, why not? spending trend has continued with the exception of brief To this end, the chapter also summarizes the barriers to periods in the 1990s where growth was flat (see figure 2.1). wider adoption of innovations that stakeholders most often However, measured as a percentage of GDP, health identified, and considers some international experience spending in Canada has outpaced many other countries with scaling up healthcare innovations. in the OECD.5 As shown in figure 2.2, Canada is among the higher spenders in OECD countries at 10.2 percent of GDP in 2013 and, with adjustment for purchasing power, US$4,351 per person in 2013. This compares to an OECD average of 8.9 percent and a similarly adjusted US$3,453.16

iv Later chapters will profile other innovations.

10 | CHAPTER 2 — TRENDING DOWN OR SCALING UP: CANADA’S HEALTHCARE CHOICE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

Figure 2.1 Total Health Expenditures, Canada 1975-2014

250

200

150

100 Total in Billions 50

0 1981 1991 2011 1977 1975 1987 1985 1979 1983 1997 1995 1993 1989 2013 1999 2001 2007 2005 2003 2009 Year

Total Health Expenditure in Current Dollars Total Health Expenditure in Constant 1997 Dollars

Source: Adapted from Canadian Institute for Health Information (CIHI). National Health Expenditure Trends, 1975 to 2014. Ottawa: CIHI; 2014. Available from: http://www.cihi.ca/CIHI-ext-portal/pdf/internet/nhex_2014_report_en

Figure 2.2 International comparison of health spendingv

CANADA’S CANADA’S RANK OECD CANADA OECD AMONG PEER AVERAGE RANKING COUNTRIES TOTAL HEALTH EXPENDITURE AS 10 .2 8 .9 10/34 7/ 1 1 A % OF GDP TOTAL HEALTH EXPENDITURE $4,351 $3,453 10/34 7/ 1 1 PER CAPITA PUBLIC EXPENDITURE ON $3,074 $2,535 13/34 8/11 HEALTH PER CAPITA PUBLIC SHARE OF TOTAL 70 .6% 72 7. % 22/34 8/11 HEALTH EXPENDITURE HOSPITAL EXPENDITURE $1,338 $1,316 15/29 9/9 PER CAPITA PHYSICIAN EXPENDITURE $720 $421 4/27 4/8 PER CAPITA

DRUG EXPENDITURE PER CAPITA $761 $517 2/31 2/9

Notes: Peer countries consist of Australia, France, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland, US, and UK; Rankings are ordered from highest to lowest expenditure; Based on 2013 data where available or next available preceding year; All figures are in $US and adjusted for .

Source: OECD Health Statistics 2015

v Figure 2.2 and related paragraphs updated to reflect 2015 OECD data (where available), which was released at the time this report was going to press. The remainder of this report has not been updated to reflect the 2015 data.

CHAPTER 2 — TRENDING DOWN OR SCALING UP: CANADA’S HEALTHCARE CHOICE | 11 UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Given the number and diversity of OECD members, most health insurance and out-of-pocket spending to finance Canadian benchmarking exercises use a smaller subset of prescription drugs, and other services. However, while that “peer countries” such as Australia, France, Germany, ranking on its face appears to favour greater public coverage, Netherlands, New Zealand, Norway, Sweden, Switzerland, it is also misleading in one key respect. Because Canada US, and UK. These comparisons seem more plausible but spends more overall than most OECD countries, its public Canada still spends more than some peers. spending in absolute per capita terms is still well above the OECD average. On the bright side, the absolute increases in health spending in Canada have slowed over the past five Canada also has an unusual pattern of spending across years, and have been outpaced by GDP growth.5 This major sectors of healthcare. It stands out from peers for pattern, however, is not unique. A similar trend became very high drug prices and total drug spending. As shown apparent across the OECD after the onset of the global in figure 2.2, on a per capita basis, Canada ranks second financial crisis in 2008.17,18 Moreover, spending may be to what the US spends on prescription drugs. Canada’s starting to rise again, although not at rates seen before spending on physician services is also significantly above the global recession.19 the OECD average, placing it fourth out of 27 countries with comparable data. Canada’s relatively high spending Canada falls slightly below the OECD average and ranks 22nd on drugs and doctors occurs despite very different pricing out of 34 countries in terms of its public share of total health and purchasing mechanisms for these two healthcare expenditure. This is due to Canada’s heavy reliance on private sectors, underscoring that single-payer systems in

Figure 2.3 Health Status Performance Profile, Canada

2.0 Burden of Chronic Disease Mortality Avoidable Infant Overall

1.5 Disease Mortality Health Health > 1.0 75th

Better — 0.5 Percentile

OECD 0.0 Average

-0.5 25th Percentile

-1.0 — Wors e <

-1.5

-2.0

s ) ) ) e h (F) y (M t Suicid ortality at Birt ality (M e: Adult t M c t th Weight ortali ir M ence: Children nfan d I Stroke Mortalityent Mortality (F) d Low B Prevalen cident Mortality (M s Inci Cancer MortalityCancer e es Heart Disease Mortality Ac et et Perceived HealthLife Statu Expectancs y b Lung Cancer MortalityLung Cancer (F) Mor Diab nsport e 1 Dia Transport AcciTra Typ

Note: The white dots represent Canada’s overall performance relative to the OECD average. Source: Adapted from Canadian Institute for Health Information (CIHI). Benchmarking Canada’s Health System: International Comparisons. Ottawa: CIHI; 2013. Available from: https://secure.cihi.ca/free_products/Benchmarking_Canadas_Health_System-International_Comparisons_EN.pdf Source: Canadian Institute for Health Information

12 | CHAPTER 2 — TRENDING DOWN OR SCALING UP: CANADA’S HEALTHCARE CHOICE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

themselves do not guarantee cost containment. Hospital Life expectancy arguably sheds limited light on healthcare expenditure is the only sector where Canada’s spending system performance because it is influenced by social is on par with the OECD average and ranks favourably determinants and behavioural choices – a caveat that also relative to peer countries. applies for perceived health status. Examining more specific and pertinent measures (see figure 2.3), one sees that Canada outperforms OECD peers on many measures Health Outcomes (e.g. stroke mortality, cancer mortality for men), while in others it does not compare well (e.g. cancer mortality for A key issue for Canadians is whether all these billions of women, especially for lung cancer).21 The overall conclusion dollars are buying better health for the population. seems to be that, for broad population health outcomes, International evidence does suggest there is some Canada’s healthcare systems register results consistent relationship between higher health spending and better with OECD averages. health outcomes. The problem is that the marginal return on these investments seems to diminish as countries spend As to health promotion and behavioural choices, Canada more on healthcare.14 This underscores the hard choices has made significant progress in reducing tobacco already confronting provinces and territories, namely consumption: the rate of daily smokers among adults has whether to spend more on healthcare or on social fallen from 22 percent in 2001 to 16 percent in 2012. determinants of health and well-being such as education However, the proportion of obese Canadians has risen and homelessness. over the past decade, with 25 percent of adults meeting height and weight criteria for obesity.22 That proportion On a related point, measures such as life expectancy at remains lower than in the US (35 percent in 2012) and birth are often cited in rankings. Canadian life expectancy Australia (28 percent),23,24 but its rise foreshadows increases was 81.5 years in 2011, more than a year higher than the in chronic health problems such as , cardiovascular OECD average, three years longer than the US, but shorter diseases, and arthritis – along with higher healthcare costs. than residents of Japan, Switzerland, Iceland and Spain.20

Figure 2.4: Percentage of Doctors Reporting That “Almost All” Their Patients Can Get a Same or Next-Day Appointment

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% France Canada Norway Sweden Australia Germany Switzerland Netherlands New Zealand United States United Kingdom

Source: Adapted from Schoen C, Osborn R. The Commonwealth Fund 2012 International Health Policy Survey of Primary Care Physicians. New York (United States): The Commonwealth Fund; 2012. Available from: www.commonwealthfund.org/~/media/Files/Publications/In%20the%20Literature/2012/Nov/PDF_2012_IHP_survey_chartpack. pdfCommonwealth Fund

CHAPTER 2 — TRENDING DOWN OR SCALING UP: CANADA’S HEALTHCARE CHOICE | 13 UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Access to Healthcare in Canada emergency rooms for conditions amenable to care by a family doctor or primary care nurse.28 Two years later, an analysis Notwithstanding the obvious importance of outcomes, from the National Ambulatory Care Reporting system showed access to care may be the aspect of healthcare that matters that half of the people in Canadian emergency rooms were most to patients and their families. Access has been an deemed to have non-urgent low-acuity conditions (see figure ongoing public concern for the past two decades. Interest 2.5).29 It is convenient to blame patients for these visits, but peaked in the late 1990s and early 2000s when stories about a more likely explanation is that access to primary and waiting times for a variety of specialized services drew wide ambulatory care (for example, care ) remains media coverage. suboptimal. The Panel suspects that some of this shortfall could be addressed by greater use of nurse practitioners for In response, the 2004 intergovernmental health accord primary and specialty care, but has also been struck that health included $5.5 billion in federal funding over 10 years to human resource planning in Canada reflects the same address wait times for five priority clinical areas: cancer, stovepipe approach that bedevils the system as a whole. heart, diagnostic imaging, joint replacement and sight restoration (cataract surgery).25 Provinces and territories While access is understandably top of mind for many reinforced this commitment with their own operating Canadians, there is another vital dimension of healthcare funds, and gave special attention to these priorities, with performance. How good is the quality of the healthcare tangible results. For example, during the last five years once Canadians access it? Answering that question the number of radiation treatments has risen 34 percent requires more specific measures than broad population across Canada, while hip replacements are up 28 percent health outcomes. and knee replacements up 24 percent. About eight out of 10 patients have received these procedures within benchmark waiting times. Notably, 98 percent of radiation therapy was delivered within the benchmark of 28 days.26 Figure 2.5 Relative Percentages of In these areas, Canada compares favourably with peer Patients Who Were countries across the OECD.21 Admitted or Not Admitted to Inpatient Care, by Acuity Level, 2010-2011 On the other hand, it appears that Canadians still have suboptimal access to ambulatory care – including family 8% doctors, various specialists, nurse practitioners and nurses, 1% non-physician psychotherapists, and physiotherapists. Access to basic primary care in particular compares poorly to other nations. For example, a 2012 study of 10 nations

conducted by the US-based Commonwealth Fund found 47% that only 22 percent of Canadian doctors say their patients can get an appointment the same or next day they call (compared to 38 percent in Australia and 55 percent in the

UK) and only 45 percent of doctors have a family practice 44% that provides for after-hours care (compared to 95 percent in the UK and 81 percent in Australia).27

The lack of access to community-based care represents a Admitted, High Acuity Not Admitted, High Acuity lost opportunity for upstream interventions that can improve patients’ quality of life, as well as prevent costly Admitted, Low Acuity Not Admitted, Low Acuity hospitalizations. It also underscores questions raised by some provincial governments about their return on major investments in primary care reform. Source: Canadian Institute for Health Information (CIHI). in Canada, 2012: A Focus on Wait Times. Ottawa: (CIHI); 2012. Five years ago, the Commonwealth Fund found that, in Available from: http://www.cihi.ca/cihi-ext-portal/pdf/internet/ comparison to citizens in Australia, New Zealand, Germany, HCIC2012_CH2_EN US and the UK, Canadians were most likely to visit hospital

14 | CHAPTER 2 — TRENDING DOWN OR SCALING UP: CANADA’S HEALTHCARE CHOICE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

Figure 2.6 Nation Summary Scores on Health Systems Performance

AUS CAN FRA GER NETH NZ NOR SWE SWIZ UK US

OVERALL RANKING 4 10 9 5 5 7 7 3 2 1 11 Quality Care 2 9 8 7 5 4 11 10 3 1 5

Effective Care 4 7 9 6 5 2 11 10 8 1 3 Safe Care 3 10 2 6 7 9 11 5 4 1 7 Coordinated Care 4 8 9 10 5 2 7 11 3 1 6

Patient-Centered Care 5 8 10 7 3 6 11 9 2 1 4

Access 8 9 11 2 4 7 6 4 2 1 9 Cost-Related Access 9 5 10 4 8 6 3 1 7 1 11 Problems Timeliness of Care 6 11 10 4 2 7 8 9 1 3 5 Efficiency 4 10 8 9 7 3 4 2 6 1 11 Equity 5 9 7 4 8 10 6 1 2 2 11 Healthy Lives 4 8 1 7 5 9 6 2 3 10 11

Health Expenditures $3,800 $4,522 $4,118 $4,495 $5,099 $3,182 $5,669 $3,925 $5,643 $3,405 $8,508 per Capita, 2011*

*Expenditures shown is $US PPP (purchasing power parity); data for Australia from 2010. Data: OECD, OECD Health Data, 2013 (Nov. 2013).

Adapted from Davis K, Stremikis K, Squires D, et al. Mirror, Mirror on the Wall: How Performance of the U.S. Health Care System Compares Internationally. New York (United States): The Commonwealth Fund; 2014. Available from: http://www.commonwealthfund.org/~/media/files/ publications/fund-report/2014/jun/1755_davis_mirror_mirror_2014.pdf

Quality of Care The Myth of the ‘Miracle System’

On several key measures of quality of care, Canada performs The most plausible interpretation of the foregoing profiles well. For example, survival rates in the 30 days following a is that Canada has been spending relatively more money heart attack are better than the OECD average,30 as are for thoroughly middling performance. Are there other survival rates after treatment of breast and colorectal cancer. nations that provide plausible examples to show we could On the other hand, the rate of post-operative pulmonary be doing better? embolism or deep vein thrombosis for hip or knee replacement surgery is higher than elsewhere in the OECD, as is the rate The experience of the UK is one. Governance of the UK’s of obstetrical trauma.31 The overall picture suggests that National Health Service (NHS) has been devolved by condition-specific quality of care in Canada may be somewhat jurisdiction to England, Wales, Northern Ireland, and above average for the entirety of the OECD. Scotland. However, the combined effects of reinvestment and restructuring have been dramatic. The result is that the As depicted in figure 2.6, however, in comparison to peer NHS, once perceived to be in chronic crisis, now tops most nations with high-performing healthcare systems, Canada rankings, while spending much less per capita than Canada.13 lags in terms of overall quality of care. In the 2014 Commonwealth Fund ranking, Canada ranked between Australia is another strong performer.13 For many years 7th and 10th on key indicators of quality. Our overall ranking Australia ranked near the bottom of the top 10 in the at 10th out of 11 nations is also sobering. OECD healthcare league tables. Today, it sits within the

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top three or five on most measures, and outperforms public spending in 2012 was about US$2,750 per capita. Canada on many major health outcome indicators (e.g. Canada’s adjusted public spend was about US$3,200 per life expectancy, infant mortality rates, mortality amenable capita – approximately 20% more and a massive difference to healthcare, diabetes prevalence and suicide rates per when scaled up nationally. 100,000).14,32 This has been achieved while constraining healthcare spending in 2012 to 9.1 percent of GDPvi, well The contrast in these two high-performing universal below Canadian spending.23 systems underscores that there is no plug-and-play healthcare model. Healthcare systems instead arise from The problem for those seeking a single model system, a socio-political, economic, and demographic context.34 however, is that Australia could not be more different from Of course, specific lessons can be learned from high- the UK. performing systems; some of those programs and principles will be covered in later chapters. However, there are two The UK depends on four unitary health services, with implications worthy of mention now. First, in learning avoidance of charges at most points of care. The latter from other nations Canada will need to adapt flexibly rather ethos will be familiar to Canadians. Specialists within the than adopt slavishly. And second, the lack of an off-the- National Health Services are paid by salary and employed shelf ‘miracle system’ lends additional importance to by regional trusts. They have limited opportunity to engage Canadian healthcare innovation at a grass-roots level. in private practice. Family physicians – or general practitioners (GPs) as they are better known – are paid on a per-patient or capitated basis. Integration of GPs with Innovative Energy on the the wider system is promoted by their involvement in Front Lines commissioning a range of other services. As noted earlier, members of the Panel were often inspired Australia, in contrast, relies on a complex web of public and somewhat overwhelmed by the number of impressive and private insurance plans and institutions. Basic coverage improvements that Canadians are busy making in their for public hospitals, physician services, and drugs is provided local and regional healthcare systems. This extremely in a national Medicare program sponsored by the federal abbreviated sampling is intended only to provide a sense government. However, about half the population has of the scope of activity. additional private insurance, and private hospitals are well-established.33 Co-payments at point of service are The Panel heard many examples of creative use of technology, common, although protections are provided for low-income not least in addressing the special challenges of rural and patients. Overall hospital budgeting is activity based, with remote communities. For example: state-level oversight but funding through federal, state and territory budgets. Last, while some specialists are salaried, • The use of “doctor in a box” robotics technology in the majority of physicians work on a fee-for-service basis northern Saskatchewan is enhancing long-distance and have considerable latitude to set their own fees. communication between patients and providers, and improving clinical consultations with bedside photo The differences between the UK and Australia are revealing and video capabilities. Likewise, the University of in other ways. As noted above, Canada’s public-private Saskatchewan’s College of ’s use of robotics mix in healthcare finance is 70:30, giving rise intuitively to for teaching has been effective and efficient in serving concerns that our lower proportion of public spending nursing students living in northern communities. contributes to our underperformance. However, while the UK has an 84:16 public-private split in spending, Australia’s • The Northwest Territories’ Med-Response initiative is split is 68:32. a new call centre service that provides a single point of contact for healthcare practitioners in remote The example of the UK also underscores the earlier caveat communities to readily access clinical expertise and about absolute spending levels. Despite its much lower triage-related advice during emergencies, along with proportion of private spending, the UK’s adjusted level of air ambulance dispatch services when needed.

vi The discussion below is based on the 2014 OECD report and primarily draws on 2012 data.

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• Newfoundland has partnered with CIHR and private • In BC, taking a leaf from the Australian playbook, industry – including IBM – to launch the Translational regional Divisions of Family Practice are facilitating and Personalized Medicine Initiative. Discussed further integration and coordination of primary care for in Chapter 7, this initiative will harness big data patients, as well as strengthening support for family analytics, top genetic and genomic research expertise, doctors and communities through recruitment and and Newfoundland’s unique population with a view retention efforts. to reducing healthcare costs and improving patient outcomes through precision medicine approaches. • The Yukon Lands and Culture Base Healing Model, developed by Kwanlin Dün First Nation Health • Nunavut Telehealth is working with the Tele-Link Department, is a holistic model that integrates Mental Health Program at the Hospital for Sick traditional and modern approaches to health. A range Children in Toronto to improve access to specialized of practitioners provide integrated care including health mental health services for children and youth. Through promotion and prevention activities, treatment on the the use of videoconferencing, mental health workers land and in the community, and traditional knowledge in Nunavut will be able to connect with each other, as sharing. well as consult with specialists in other provinces in order to provide comprehensive clinical psychiatric • PEI has partnered with the -based and psychological assessments. pharmaceutical company AbbVie to develop and implement a province-wide management • Known as the “hospital without walls,” ’s strategy, which will provide access to newer, more Extra Mural Program continues to be recognized as an effective drug therapy; strengthen screening and referral innovative publicly funded program that provides processes; and enable more seamless care for patients comprehensive health services to individuals living in living with hepatitis C. their homes or communities. Since its inception in 1981, the program continues to evolve, most recently adopting • In Québec, l’Hôpital du Sacré-Cœur de Montréal pairs the use of telehealth and patient education to enhance undergraduate nursing students from the Université communication with providers and support self-care. de Montréal and the Université du Québec en Outaouais with experienced critical care nurses in a six month More broadly in health information technology, literally residency program. This program has dramatically scores of projects were brought to the Panel’s attention, improved the competencies of new nurses, as well as ranging from scaling-up of patient portals in , their recruitment and retention at the hospital. to the near-universal adoption of electronic medical records by physicians across BC and Alberta. The Panel also heard and read about a number of creative approaches to community outreach programming. These The Panel heard and read, too, about the development programs support experimentation and evaluation to help of a number of new healthcare delivery models, where patients navigate the system and plan for their own care. groups of stakeholders – professionals, institutions, As one example, the INSPIREDTM program has been communities, or industry – are working together in novel providing outreach and support to Halifax patients living ways to deliver more comprehensive and effective care with Chronic Obstructive Pulmonary Disease. Results from to patients. Among them: 2012 showed dramatic reductions in emergency department visits and hospitalizations. Harder to measure is the peace • In Nova Scotia, and BC, are being of mind that both patients and their families report from deployed in new extended roles – for instance, home a better understanding of the disease, its management, visits to assist with providing primary healthcare for and its usual course. Other encouraging examples will be patients who are housebound. presented in Chapter 5.

• In Alberta, Strategic Clinical Networks have grown From a more systemic perspective, the Panel was informed rapidly as “bottom-up networks” that foster inter- about a number of initiatives that provided public sector professional and clinical/academic collaboration to support for innovation efforts and related culture change. meet the specialized needs of patients, both upstream Among the many notable efforts: and downstream.

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• The BC government has made significant investments The barriers most commonly identified are summarized in health data and research, and set innovation goals below: for the healthcare system as part of the province’s Innovation and Change Agenda, introduced in 2009. Lack of meaningful patient engagement: Many stakeholders observed that patient and family engagement (as part of • Alberta Innovates – Health Solutions has focused its patient-centred care) is important to fostering healthcare efforts on marrying applied healthcare research to innovation, but under-developed in Canada. Chapter 5 grass-roots innovation, with many successes to date. deals in detail with this issue.

• In Ontario, a very dynamic environment for healthcare Outmoded human resource models: Time and again, the Panel innovation has been fostered in Toronto by the heard that Canada’s physicians are a superb national convergent work, collaboration, and in some cases resource, but our healthcare systems have been organized co-location of a variety of organizations, including around and under them in dysfunctional ways. The result the University Health Network, MaRS Discovery is a waste of talent in all directions. Systems make District, the Women’s College Hospital, the University suboptimal use of the special training and skills not only of Toronto, and Saint Elizabeth Health Care. of physicians, but a wide range of other healthcare professionals. This issue receives attention in Chapters 5 As the lists of projects grew in the course of the Panel’s and 6. travels, members were reminded of this country’s heritage of caring and the ‘can-do’ attitude that has long been a source of pride for Canadians. They also found themselves “We need to connect the dots. It’s one of our increasingly puzzled as to how and why Canada’s healthcare greatest weaknesses... We have some of the performance was lagging. greatest programs in the world, but we need to bring them together.” Barriers to the Scaling-Up of Innovative Ideas Stakeholder Submission

Consultations with stakeholders and citizens again proved illuminating. Many submissions and discussions converged System fragmentation: Many saw the system to be burdened on the significant barriers confronting those trying to by a lack of integration that effectively stifles innovation, initiate, evaluate, and ultimately scale up innovations in particularly the spread of innovation between organizations healthcare. and across jurisdictions. Managers and professionals in one region after another acknowledged that patients and families lose the most in a poorly-coordinated system. “There is a lack of funding opportunities to However, they also lamented how the non-alignment of support successful regional initiatives to incentives undercut both strategic purchasing and efficient management. This factor – lack of integration – emerged become national initiatives. While economies time and again as the single most important barrier to of scale work in favour of national incentives, innovation. Chapter 6 is devoted to the of integration lack of stable operating funding at the national and innovation.

level impede these efficiencies. Turning a Inadequate health data and information management capacity: successful regional into a successful High-performing healthcare systems generate large national initiative requires the commitment of volumes of data and turn those data into useful information for payers, providers, patients, and industry partners. a stable funder.” Canada still lags in this regard. Chapter 7 offers a more detailed response to this challenge. Stakeholder Submission

18 | CHAPTER 2 — TRENDING DOWN OR SCALING UP: CANADA’S HEALTHCARE CHOICE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

Lack of effective deployment of digital technology: Canada is Can Spread and Scaling-Up Win playing catch-up compared to high-performing OECD the Day? peers in the deployment and meaningful use of electronic medical and health records. These factors underpin the lag in health data generation and information management Many stakeholders advised the Panel that the gridlock in capacity noted immediately above, and reduce the Canadian healthcare could be meaningfully improved responsiveness of our healthcare systems to innovation. simply by finding better ways to spread and scale up all the initiatives and programs that are currently working Barriers for entrepreneurs: It appears that entrepreneurs well but have not been widely adopted. across Canada are finding it difficult to introduce, sustain and scale up their innovations in the healthcare system. What exactly is meant by these terms? “Innovation spread” Leaders of companies – particularly smaller enterprises – is primarily a diffusion exercise, involving sharing and complained about cumbersome approval processes, diffuse learning among relatively homogeneous groups of accountability, opaque and fragmented purchasing practitioners or settings. For example, studies dating to processes, mistrust of the private sector, and a perverse the 1950s have identified the factors involved in doctors unwillingness to buy Canadian. Stakeholders with being slow or rapid adopters of innovations, along with international experience argued that these barriers are possible modalities for speeding up adoption. 36 much more prevalent in Canada than in other countries, where private enterprise is welcomed as a risk-sharing partner. Chapter 9 returns to this issue. “We have the best pilots and studies, but we don’t seem to take it to the next step… A risk-averse culture: It is unsurprising that healthcare delivery innovation isn’t just coming up with an idea, systems are risk-averse. Mistakes can be fatal. However, some stakeholders argued that the precautionary principle it’s about making it sustainable.” in clinical care had pervaded the organization and finance of the system as a whole, contributing to stasis and impeding Participant at Regional Consultation the spread of innovation. Until a change in culture is signalled, they argued, leaders in the system may be reluctant to confront those who have a vested interest in the status quo, or who simply have what was described as “NIH This diffusion approach is largely what the Panel witnessed syndrome” – a pathological suspicion of anything that is in Canada – a strategy of engaging professionals and ‘Not Invented Here.’ The Panel supports these concerns. managers, and sometimes entire organizations, to move slowly in a positive direction. A provincial quality council Inadequate focus on understanding and optimizing innovation: might speed up the adoption of surgical checklists or Stakeholders told the Panel that healthcare systems leaders process-of-care improvements. At other times, a searchable make too many decisions that are short-term and politicized. repository of promising practices might be put into play, They observed a lack of overarching vision for Canada’s with positive results. This is all important work, but given healthcare systems, and called for greater clarity of objectives the identified barriers, unlikely to precipitate rapid changes and firmer follow-through on priorities for innovation, in Canadian healthcare. architectural changes to the system, and rules of engagement for participation by innovators from the public and private “Scaling up,” in contrast, implies taking a system-wide sectors alike. Stakeholders also noted the limited funding perspective on adoption. “Scaling up means expanding, for pragmatic evaluation as distinct from academic research, adapting and sustaining successful policies, programs or and lack of both mechanisms and the political will to spread, projects in different places and over time to reach a greater scale up, and sustain high-potential innovations. number of people.”37 This requires thinking less about small collaborative approaches and more about long-term This list of barriers may explain why a former federal health vision, the use of financial incentives (or removal of minister once famously characterized Canada as “a country perverse ones), changes to laws and regulations, and other of perpetual pilot projects.”35 Certainly the combination of interventions that might spur system-wide adoption. creative energy and substantial barriers would also explain the frustration among stakeholders cited in Chapter 1.

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“When we try to spread innovation within a Permanente, the largest managed care organization in region or between regions, we fail day in and the US with more than 35 medical centres and 150,000 day out. We don’t do well… we haven’t figured employees, constantly uses its varied operations to test new ways of delivering healthcare. If the results are out what the barriers are.” positive for patients, Kaiser rapidly adapts and scales up the resulting innovations to reach its almost 10 Participant at Regional Consultation million subscribers.

• Last, the Panel was impressed by the iterative approach The World Health Organization deepens this definition by to innovation being taken by the Center for Medicare warning that more resources alone are rarely enough to and Medicaid Innovation (CMMI) in the US healthcare ensure successful scaling-up. Scaling-up instead requires a system. Under the 2010 , the Medicare dedicated focus on removing constraints, which may include and Medicaid administration has wide latitude to amend weak management systems. Success factors include: 38 payment programs, so long as the Center has evaluated a particular payment innovation and found, in a rigorous • A partnership of organizations working on service “signature test,” that it increases the value of the affected delivery, financing and/or stewardship (co-ordination, services.vii The CMMI is particularly interested in models regulation etc.) that consolidate funding across service lines – in other words, integrating budgets to move the focus towards • A highly committed group of individuals to push it along patients and populations. This work will be revisited in Chapter 6. For now, it is worth noting that, even with • Monitoring implementation, in order to assess progress an approach based on rapid-cycle iterations to refine relative to objectives and for identifying aspects of the payment models, scaling up has been challenging. scale-up which are not working well, often a neglected Studies are now designed to assess not only the processes component of efforts to scale up and outcomes of care, but also the factors that might enable rapid scaling-up of a given payment model. Though explicit scaling-up strategies are uncommon in the healthcare systems of the OECD, the Panel did learn of “Our landscape is littered with clever innovative examples where high-performing health systems had boutiques, and when we try to scale them they invested to take successful local experiments and scale them up to the level of regional or even national health systems: remain clever innovative boutiques. They can only be run by people like those who started • England’s National Health Service has recently established a formal NHS Innovation Accelerator them and in places like where they were started. program, established with the goal of “giving patients What we imagined was taking those boutiques more equitable access to cutting edge, high impact and scaling them into a chain of healthcare products, processes and technologies, by focusing on the conditions and cultural change needed to enable Walmarts. In reality, what we may need to do is the NHS to adopt innovations that matter to patients, develop a franchising strategy first.” at scale and pace.”39 This program, launched in January 2015, will select up to twenty pioneers to bring into US Health & Human Services Official, play tried and tested innovations from the UK and commenting on payment reform under around the world. The chosen innovations will be ‘Obamacare,’ June 2015 strategically scaled up across parts of the NHS to improve care and reduce costs. The program is run as a partnership between the National Health Service, UCL Partners and the Health Foundation.

vii Any new model can be scaled up if it: a) “reduces spending while maintaining • Many non-profit group health plans in the US have or improving quality, or improves quality without raising spending, taking into taken steps to scale up innovation within their account a formal certification by the Center for Medicare and Medicaid Services 40 Chief Actuary,” and b) “does not adversely affect the coverage or provision of integrated delivery systems. For example, Kaiser benefits.”

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The Panel was encouraged by these activities, chastened by the clarity and focus of the work being undertaken, and also mindful that these initiatives were all unfolding in healthcare systems with a different architecture.

How in Canada can one reconcile the evidence on factors that allow effective scaling-up with the many barriers the Panel identified in its consultations? The answer, bluntly, is that reconciliation is impossible without a new approach. Too many of the barriers are systemic, not least the fragmentation of Canadian healthcare. As will become clear, the Panel believes that more effective scaling-up can only occur with new federal investments deployed through new mechanisms, the adaptation of existing machinery, a commitment to scaling up on the part of provinces and territories, a new culture of collaboration among jurisdictions, and a concerted national drive towards system reforms that integrate budgets, align incentives around quality and value, and sharpen provider accountabilities. That leads logically to the question of the federal government’s role and its current healthcare machinery.

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22 | CHAPTER 2 — TRENDING DOWN OR SCALING UP: CANADA’S HEALTHCARE CHOICE Chapter 3 The Evolving Federal Role in Canadian Healthcare

“Contrary to popular opinion, healthcare is not an exclusive provincial responsibility under the Canadian constitution… Over time, a complex system has evolved in which the federal and provincial governments each have specific regulatory and administrative roles. To deal with the inevitable policy overlaps and interdependencies, a thick system of intergovernmental processes and institutions has grown up over the last decades.” 41

Gregory P. Marchildon

“Canada’s size and federated structure (with 14 different healthcare delivery systems) creates barriers. It has often been said that Canada is a nation of pilot studies because brilliant, local initiatives that show tremendous promise tend to be very time-limited, are not adequately funded to include a phase of scaling-up and spreading of the knowledge, and/or are shared through mechanisms such as academic journals that have a limited reach to the front lines where innovation can grow.”

Stakeholder Submission UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

The Evolving Federal Role in Canadian Healthcare

Medicare remains Canada’s most iconic social program, With so many reviews arising at different times and places, and continues to make a difference to the lives of millions some divergence occurs in the analyses and of Canadians. However, to recapitulate, three disconcerting recommendations, as would be expected. However, what themes have emerged from the foregoing chapters: is more striking is the consistency in both diagnoses and prescriptions for change. Similar themes emerge again • International comparisons show that Medicare is and again, including: aging badly. • the lack of an integrated and patient-centred • A wide range of Canadians working in and around healthcare system, our healthcare systems have launched impressive innovations at the local and regional level, but spread • the importance of efficiency and value-for-money in and scaling-up of these improvements are slowed by ensuring system sustainability, and a number of barriers, many of which are systemic. • the need to build a shared knowledge-base and learn • Finally, while the programmatic architecture of from it to improve services for patients and overall Medicare initially helped Canada to achieve universal system management. access to high-quality hospital and physician services, that structure has now become one of the major These reviews have also reaffirmed the values of barriers to transformation of our healthcare systems. universal, portable public insurance for healthcare, and the principle of access based on need rather than ability Another layer of complexity in healthcare reform is to pay. Greater private financing has been consistently Canada’s unique combination of constitutional, political, rejected due to equity and efficiency concerns.50 and cultural specificities. That is a logical segue to the themes of this chapter: the evolving federal role in All these task forces, inquiries, and commissions have healthcare, and the relevant machinery of the Government added positive momentum for improvements in Canadian of Canada as it intersects the healthcare realm. Before healthcare. Yet, they have not resulted in fundamental going down that path, it seems both informative and duly change to the system’s architecture, such as modernizing respectful to review and reflect on the work of past provider incentives and accountabilities or extending advisory bodies and commissions. coverage beyond physician and hospital services. This phenomenon is so pronounced that it galvanized publication in 2013 of a scholarly book, entitled Paradigm A Common Diagnosis From Freeze: Why it is so hard to reform health-care policy in Health System Reviews Canada.54 Whatever the causes of that “freeze,” jurisdictions seem hesitant to go it alone in making Canadian healthcare has been studied over the past 25 changes needed to effect a general thaw. Coalitions of years by a multitude of task forces, royal commissions and jurisdictions may therefore be essential for change to inquiries on healthcare across provinces and nationally.42 occur, but building such alliances is no easy task in our The most prominent provincial reviews, arguably, were federation. Seaton in BC,43 Mazankowski in Alberta,44 Fyke45 and Dagnone46 in Saskatchewan, Sinclair47 and Drummond48 in Ontario, and Clair49 in Quebec. However, there have Facing Constitutional Realities been many other provincial task forces and committees. At the national or federal level, key reviews included the Canada by any measure has a decentralized healthcare National Forum on Health,50 the Romanow Commission,51 system. This reflects a constitutional reality, wherein the Kirby Senate Committee,52 and most recently, at the provinces and territories have primary responsibility for inter-provincial level, the Council of the Federation’s laws and regulations governing the administration and Health Care Innovation Working Group.53 delivery of healthcare services to their residents.

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It is true that the Constitution Act of 1867 is practically pharmaceutical benefits; and funding of both public devoid of references to health and healthcare. Section hospitals and population health programs (along with the 91(11) assigns responsibility for “quarantine and the states and territories). It regulates “much of the healthcare establishment and maintenance of marine hospitals” to system, including private health insurance, pharmaceuticals, the federal government, while Section 92(7) assigns and medical services; and has the main funding and responsibility for all other hospitals to the provinces. That regulatory responsibility for government-subsidized is the extent of direct commentary on healthcare in our residential care facilities.”59 Significant reforms have been nation’s founding law. However, the Constitution also implemented in recent years, touching on everything from assigns powers over property and civil rights (section primary care and hospital funding to incentives for private 92(13)) and matters of “a merely local or private nature” insurance, often with close federal-state collaboration. (section 92(16)) to provinces.55 Together, these sections have been interpreted by the courts to mean that provinces Such comparisons are not meant to imply that Canada is have “exclusive … responsibility for direct delivery of most condemned to underperform in healthcare because it lacks medical services, the education of physicians and numerous sufficiently strong levers at the national level. On the other related functions”. The courts have also reaffirmed contrary, Canada has achieved a surprisingly high degree the federal role in certain aspects of health and healthcare, of inter-jurisdictional comparability in coverage for rooted primarily in federal jurisdiction over criminal law medically-necessary hospital and physician services. What and federal spending powers. In particular, “the federal one might instead conclude is that Canada has a government uses its spending power to play a strong role demonstrated capacity for creative work-arounds to move in the Canadian Medicare system through its financial healthcare forward – and progress in future will likely be contributions and by setting certain national standards made in a similar vein. by means of the Canada Health Act”.56

This constitutional construct has the advantage of placing The Canadian Way: Visionary delivery of a ‘high-touch’ service in the hands of an order Incrementalism of government that is closer to citizens. It allows for the regional variation in policies that is essential in a country In Chapter 1, the story of Medicare was sketched in with such geographic and demographic diversity. And, as iconographic terms with heroic figures. One might also a happy side-effect, it promotes a degree of pluralism, portray Medicare as a story of visionary incrementalism. allowing each sub-national jurisdiction to be a living Dating back decades, the vision of many advocates was laboratory for healthcare innovation. that Canadians should have reasonably comparable access to healthcare based on need alone. Getting there required Looking internationally, other federations have struck a patience and a careful mix of small and big steps. different balance.

For example, in the US, the federal administration wields Top-down Federalism: the Federal considerable influence on healthcare financing and Spending Power delivery through its responsibility for healthcare for seniors and its conditional cost-sharing of state-level programs Much has been written about how the federal government for low-income individual and families. Robust federal has used its spending powerviii to shape Canada’s healthcare entities also provide strong national leadership in the system. Federal grants were used to support the construction spheres of veterans’ healthcare, health research, drug of hospitals and medical schools in the 1940s and 1950s. As regulation, and public health.57 As noted in the preceding outlined in Chapter 1, during the 1950s and 1960s, federal chapters, the American federal government has used these cost-sharing with provinces allowed the adoption of universal powers to make an unprecedented push for innovation insurance across the country, followed by the over the past few years under the banner of the 2010 adoption of cost-shared universal public medical insurance Patient Protection and Affordable Care Act. 58 in the 1960s and 1970s.60

In Australia, the Commonwealth government has a viii The federal spending power is inferred from Parliament’s jurisdiction over prominent role that includes: administering Medicare – the public debt and property (section 91(1A)) and its general taxing power (section 91(3)), effectively giving the federal government the ability to tax and spend national medical insurance scheme; supplying as it sees fit. (Constitution Act of 1867).

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In the 1980s, when concerns about extra-billing by doctors powers to create new social programs in areas of provincial and hospital user fees threatened the Medicare vision, jurisdiction unless there is broad support from provincial Ottawa introduced the Canada Health Act.61 As already and territorial governments.ix noted, that law made federal transfers conditional on provincial and territorial health insurance plans meeting As a result, the Panel observes that federal spending certain criteria and conditions. It restored some of the power has evolved into quite a lot of spending and not leverage that had been lost when the federal and provincial much power. governments agreed in 1977 to shift from cost-shared arrangements to formulaic block transfers for health and How much spending? In 2015-16, the Canada Health post-secondary education.60 The Canada Health Act remains Transfer (CHT) will provide $34 billion in cash support to in force today, although its role and relevance remains the the provinces and territories for their role in administering subject of debate and delivering healthcare.63 Figure 3.164 shows that federal health transfers account for an average of 23 percent of The federal spending power has often been a source of provincial/territorial spending on healthcare.x From an inter-jurisdictional controversy. Provinces seized the historical perspective, federal health transfers as a share opportunity when the federal government offered them of provincial health spending are now almost as high as more autonomy in funding and steering healthcare with when the Canada Health Act was introduced in 1984. block funding in the 1970s. Tensions rose when the federal government unilaterally reduced the growth of health Even under the cost-sharing agreements of the 1970s, the transfers in the early 1980s, followed by a freeze, and then overall federal share of provincial health spending never a cut to cash transfers of more than 30 percent in the 1995 approached 50 percent as is sometimes asserted. This is federal budget.62 After that, provinces and territories saw because cost-sharing only applied to hospital and physician the federal government as an unreliable funding partner, services and not to other services funded by provincial and vowed never again to place themselves in the position of making promises to their residents that they might not have the resources to meet. Though never codified in an ix These rules were made explicit in the intergovernmental Social Union Framework Agreement of 1999, which set the stage for federal reinvestment in healthcare enforceable way, a new approach was agreed in the following cuts to fiscal transfers. aftermath of the failed Meech Lake and Charlottetown x This does not include support provided to “have-not” provinces through the constitutional renewal processes. In effect, the federal Equalization program and to territories through Territorial Formula Funding, a government is now precluded from using its spending sizeable portion of which is allocated to healthcare.

Figure 3.1 Cash Health Transfer as a % of PT Government Sector Health Expenditures (Total Canada)

40%

35%

30%

25%

20%

15%

10%

5%

0% 1 6 9 2 5 8 4 3 6 9 5 12 -9 97 00 -1 -7 -7 -8 -8 -8 -9 -0 -0 -0 11- 14 81 75 78 84 87 990 20 19 1 993 996- 999- 002 005 008 20 19 19 19 19 1 1 1 2 2 2

26 | CHAPTER 3 — THE EVOLVING FEDERAL ROLE IN CANADIAN HEALTHCARE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

health plans.xi Moreover, there is no agreed benchmark, number of innovative models for primary care have been historical or otherwise, for what a fair share would be. rolled out, there is thus far surprisingly limited evidence for a transformative change in quality, accessibility, or cost- The federal government for its part has clearly decided to effectiveness of primary care.69 Similarly, in British Columbia, step away from using health transfers as a way to steer the challenges related to comprehensiveness and access to next generation of healthcare reforms. That much was primary care have persisted, despite the implementation signalled in December 2011 when, as outlined earlier, the of new fee codes (on top of regular fees) that were intended government decided to tie the Canada Health Transfer to address these issues.70 escalator to nominal GDP growth beginning in 2017-18, with a minimum three percent increase per year, and no conditions Examining the record of all three of these funds, one sees beyond meeting the terms of the Canada Health Act.65 many exciting projects. However, a number have a strongly academic flavour or consist of pilot projects of uncertain generalizability. There is also little sense of follow-on Bottom-up Federalism: projects focusing on spreading or scaling-up of these Experimentation and Pilot Projects initiatives within a jurisdiction, let alone on a wider geographic basis. Here the Panel emphasizes that, Federal support for capacity-building and pilot projects in notwithstanding laments about the pervasiveness of pilot healthcare delivery has also been part of the Government projects in Canada, creating and sharing knowledge through of Canada’s approach over the past two decades. The basic such projects is desirable. The real failing has been in the justification was that resources to innovate are difficult to capacity of our healthcare systems to spread or scale up find in provincial and territorial health ministries that are the best ideas from those projects. under constant pressure to invest every tax dollar into front-line services – a rationale that remains relevant today. On the other side of the coin, pilot projects are less likely to have impact or uptake unless they: i) enjoy wide Among the notable federal programs created since the stakeholder support and address pressing health system mid-1990s were the 1997 Health Transition Fund ($150 needs; ii) act to link multiple segments of the system and/ million over three years),66 the 2000 or align incentives around change; iii) take into account Transition Fund ($800 million over five years),67 and the from the outset all the systemic barriers that prevent new 2007 Patient Wait Times Guarantee Pilot Project Fund ($30 approaches from being successfully adopted in the pilot million over three years).68 project, let alone spread passively and scaled up actively; and iv) are consistent with a vision of healthcare delivery The Panel respects the fine work flowing out of these reform at the upper reaches of government, and therefore initiatives, but also offers a number of observations about supported by both funding and political will. this strategy. There are currently no active federal programs with a First, the largest fund by far was the Primary Health Care focused mandate to support pilot projects in healthcare. Transition Fund. In it, the vast majority of funding was However, Health Canada continues to support capacity- allocated on a per-capita jurisdictional basis. Such allocations building across the country through existing contributions tend to undercut the concept of allocation based on the programs, such as the Health Care Policy Contribution merits of an initiative and its scalability nation-wide. The Program ($25 million per year). largest single commitment went to support primary care “transformation” in Ontario. Health accords: Setting Goals, Primary care reform in Ontario has been a massive Measuring Progress and Following endeavour that, over many years, has unequivocally succeeded in shifting payment modalities and raising the Money incomes for thousands of family physicians. However, as a 2014 review by Sweetman and Buckley shows, while a The recession of the 1990s saw significant fiscal restraint at both the federal and provincial/territorial levels. By the end of the decade, with economic growth on the upswing xi The big drop in cash transfers that occurred in the late 1970s reflects the transfer of tax points to provinces under Established Programs Financing. and concerns about access and wait times for healthcare

CHAPTER 3 — THE EVOLVING FEDERAL ROLE IN CANADIAN HEALTHCARE | 27 UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

boiling over, governments were poised to make significant Figure 3.2 Cost Driver Contributions to reinvestments. This sparked a new era of federal-provincial Physician Expenditure, 1998 to 2008 health accords with unprecedented investments by both

orders of government. The menu for shared renewal varied Average Annual Increase = 6.8% with the accord, but rolled up to an ambitious agenda: 100%

improved access to care and diagnostic services, reduced 1.50% wait times for surgical interventions as noted in Chapter 80%

2, the rolling out of electronic health records, alleviation 1.00% of health human resource shortages, reforms to primary 60% healthcare, investments in home care, and implementation 0.60% of a national pharmaceutical strategy. In keeping with 40% the prevailing intergovernmental ethos, the health accords

set out shared principles and objectives, and committed 3.60% all jurisdictions to measure progress and report publicly 20% on the results achieved. That is, governments would not be accountable to each other, but rather to the citizens they 0% serve.71,72 Utilization per Capita (Adjusted) Population Aging

It may be still too early to pronounce in any definitive Population Growth Fee-for-Service Prices manner on the long-term legacy of the health accord period. Progress was certainly made on many fronts. However, Source: adapted from Canadian Institute for Health Information (CIHI). Health Care Cost Drivers: The Facts. there were also disappointments, including unfulfilled Ottawa (CIHI); 2011. Available from https://secure.cihi.ca/- promises to create a national pharmaceutical strategy and free_products/health_care_cost_drivers_the_facts_en.pdf a national approach to address home care, as well as limited progress in transforming primary healthcare.

More fundamentally, with the benefit of hindsight, it National Machinery to Support appears that much of the increased federal investment Partnerships and Collaboration during this period was absorbed into the system in the form of increased compensation for physicians, higher One approach to supporting innovation and reform in wages for healthcare providers, and increases in the volume Canada’s decentralized healthcare system has been the of services provided. For instance, as shown in figure 3.2, development of national agencies to support pan-Canadian CIHI’s analysis of physician cost drivers in 2011 indicated collaboration. Health Canada currently provides sustaining that between 1998 and 2008 “physician fee increases funding for eight national arm’s length health organizations (average annual increase of 3.6 percent) were the main that have inter-jurisdictional collaboration as a central part cost driver during this period, accounting for approximately of their mandates. one-half of annual growth in expenditure.”5 Pan-Canadian health organizations (PCHOs) have shown In other words, it is arguable that, rather than buying themselves able to function across jurisdictions, bridge federal- change, federal reinvestments bought more of the same. provincial-territorial sensitivities in healthcare, and, albeit To that implied criticism, those involved might well reply: with uneven success, provide leadership and coordination in buying more was always the primary objective. Nonetheless, important areas. Their legitimacy arises in part because they an opportunity was missed. Priorities shifted, federal- have been established as not-for-profit corporations at arm’s provincial-territorial goodwill defaulted back to jurisdictional length from the federal government. PCHOs have varied positioning, and then the global economy went into a approaches to shared governance that include representation tailspin. We now have a vastly different environment in from governments, experts and stakeholders. This helps healthcare. The question for the federal government is PCHOs to pursue partnerships and shared objectives in a how to make the most of its role and levers to support the way that meets public and stakeholder expectations for next generation of improvements to healthcare in Canada. national coherence with less political friction than would occur with direct federal engagement.

28 | CHAPTER 3 — THE EVOLVING FEDERAL ROLE IN CANADIAN HEALTHCARE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

Figure 3.3: Pan-Canadian Health Organizations Funded by the Federal Government

Pan-Canadian Health Description Origin Federal FTEs74 Organization Funding $M/y 2014-1573

Canadian Institute for Holds much of Canada’s healthcare data and Health Information measures and reports on health system 1992 77 7. 675 (CIHI) performance .

Canadian Agency for Assesses and advises governments on the Drugs and cost-effectiveness of drugs and technologies, to 1989 16 145 Technologies in Health (CADTH) aid in decisions on coverage and reimbursement . Makes joint investments with provinces and Canada Health territories to implement health information and 2001 88 .4xii 140 Infoway communication technologies, and support their uptake .

Canadian Foundation Accelerates healthcare improvement efforts for Healthcare through partnerships and knowledge-sharing 1996 11 .6xiii 43 Improvement (CFHI) activities . Canadian Partnership Coordinates implementation of a national 2006 47 .5 95 Against Cancer (CPAC) strategy on cancer prevention and control .

Mental Health Acts as a catalyst for improving the mental health Commission of system and changing the attitudes and behaviours 2007 14 .3 90 Canada (MHCC) of Canadians around mental health issues . Canadian Patient Develops tools and partnerships to advance a 2003 7 .6 35 Safety Institute (CPSI) culture of patient safety . Canadian Centre for Uses evidence to inform development of strategies Substance Abuse 1988 6 .8 50 (CCSA) and partnerships to address substance abuse . TOTAL 269.9 1273

xii 2013-14 draw down on 2007/2010 allocations. xiii Estimated 2014 expenditures from endowment.

Figure 3.3 illustrates how PCHOs vary in terms of funding, Taken together, these pan-Canadian health organizations mandates and structures. The first was established in the represent a federal investment of some $270 million per late 1980s. Some were the subject of federal-provincial- year and employ over 1200 personnel. This is very small territorial agreements, while others were launched when relative to a healthcare system that spends over $215 billion the government of the day chose to shine a light on a annually, but does constitute a significant resource for particular issue. Some represent fairly large contributions pan-Canadian collaboration. from Health Canada (e.g. CIHI at $77.7 million annually), while others are small (CPSI at $7.6 million). Some have As discussed in Chapter 4 and elsewhere in this report, the boards with representation from Deputy Health Ministers Panel sees PCHOs as building blocks for a collaborative across Canada (Infoway), while others consist of members- approach to healthcare innovation. Most of these at-large (CFHI) and others are a blend of the two (CIHI). organizations have had the opportunity to interact with Some are cost-shared with provinces to a greater or lesser the Panel over the course of the past year. Each has degree (CIHI, Infoway), while others cost share on a demonstrated a strong commitment to supporting change minimal basis, often project-by-project (CFHI, CPSI). in their respective spheres of activity. In its recommendations on PCHOs, the Panel has taken the view that a more

CHAPTER 3 — THE EVOLVING FEDERAL ROLE IN CANADIAN HEALTHCARE | 29 UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

integrated suite of agencies is desirable to create critical have been launched in: youth and adolescent mental health, mass while reinforcing the importance of breaking down primary and integrated healthcare innovation, and chronic existing silos. In other words, what is good for each diseases.78,79 Though it is early days, the Panel sees SPOR healthcare system in terms of greater integration and as synergistic with some of the objectives delineated in its collaboration is also good for the machinery supporting report, and addresses possible future directions for and pan-Canadian innovation in healthcare. collaboration with SPOR in Chapters 4 and 7.

In addition to CIHR, the federal government supports Research in Support of health research through the Canadian Foundation for Collaboration Innovation (CFI) and Genome Canada. CFI is an independent corporation that provides infrastructure The federal government is a key player in health funding to support leading-edge research and development research, which in turn is an important input into the in Canada.80 Genome Canada is a non-profit corporation innovation process. The Canadian Institutes of Health that invests and manages large-scale research projects in Research (CIHR) is Canada’s premier health research priority areas including health (e.g. personalized medicine, funding agency, created in 2000 as an independent bioinformatics, etc.).81 While CIHR reports to the federal agency that is accountable to Parliament through the health minister, CFI and Genome Canada are part of the Minister of Health. With an annual budget of nearly industry portfolio. $1 billion, CIHR supports peer-reviewed research across four main ‘pillars’: basic science, clinical, health services and policy, and population and public health. The CIHR Federal Health Levers: Beyond model – with 13 distinct institutes across a range of the Usual Suspects health disciplines – was itself an innovation that has drawn praise and interest from other countries.75 Beyond the big, visible levers reviewed in the previous section, there is a second tier of federal responsibilities and Research in basic science was the primary focus of levers that have the potential to make a significant CIHR’s predecessor organization, the Medical Research contribution to healthcare innovation in Canada. Most of Council of Canada. The addition of the other three these fall under the responsibility of the federal health pillars has broadened CIHR’s mandate. However, an minister, but some are housed in other ministries. external review in 2012 showed that, over the course of a decade, basic science has continued to receive about 80% of all funds awarded through open grant Regulation of Health Products, Food, competitions. The smallest proportion in that period and Risks to Health has been awarded to health services and policy. Grantees from this pillar also consistently reported the Although Health Canada is responsible for regulating a highest proportion of research studies that led to range of products, tobacco and controlled substances and changes in healthcare programs or policies.76 risks posed by environmental factors,82 the regulation of pharmaceuticals and medical devices is of particular interest Partly in response to the need for research that would be to the Panel given the link to healthcare innovation. more relevant to patients, front-line clinicians and healthcare system managers, CIHR launched the Strategy Health Canada has responsibility for regulating for Patient-Oriented Research (SPOR) in 2012. The SPOR pharmaceuticals, including the assessment of the safety, initiative brings together federal, provincial and territorial efficacy and quality of drugs before approval of sale in partners with the goal of integrating their research into Canada, and is also responsible for monitoring post- care and ensuring that the right patient receives the right market safety of drugs. The federal government also intervention at the right time. The strategy is comprised regulates the price of patented drugs in Canada through of five elements – SUPPORT units, networks, capacity the Patented Medicine Prices Review Board (PMPRB) by development, patient engagement and improving Canada’s virtue of authorities set out in the Patent Act.83 The PMPRB competitiveness in conducting clinical trials.77 To date ostensibly regulates patented drug prices to ensure that SUPPORT units have been created in several jurisdictions prices are “not excessive” by limiting increases in the with matching funding from provinces, and three networks price of existing patented drugs to the rate of general

30 | CHAPTER 3 — THE EVOLVING FEDERAL ROLE IN CANADIAN HEALTHCARE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

, and by benchmarking the price of new patented Figure 3.4: Spending on Health Services for First Nations, Inuit, and Other Federal drugs against comparable drugs already on the Canadian xiv market or, in the case of breakthrough drugs, to a basket Populations in 2014/15 (in $ Millions) of comparator countries.84 First Nations and Inuit Health 2563 Health Canada also oversees the regulatory framework for Correctional Service of Canada 189 medical devices, which includes medical devices used in Citizenship and Immigration 58 the treatment, mitigation, diagnosis, or prevention of disease. The department is responsible for assessing the National Defence 537 safety, effectiveness and quality of medical devices through Veterans Affairs 1100 pre-market review, post-approval surveillance and quality TOTAL 4447 systems in the manufacturing process.85

The Panel has heard a range of views from stakeholders Figure 3.5: First Nations and Inuit Health about the effectiveness of these levers and has set out its Branch Budget, 2014-15 analysis and recommendations in Chapters 8 and 9.

398.6M/16% Health Services for First Nations, Inuit, and Other Federal Populations 832.2M/32% 203.9M/8% The federal government is responsible for provision of health services to a number of federal populations, including First Nations and Inuit, the Canadian Forces and veterans, prisoners of federal penitentiaries, and some refugee claimants. Taken together, these programs account for nearly $4.5 billion in annual spending, as shown in figure 3.4.86 Observers have remarked that this makes the federal government the fifth largest healthcare system in the country. In reality, however, these programs are 1127.9M/44% all managed independently by different departments – a Primary Health Care Health Infrastructure Support fact that leads the Panel to question the absence of a Supplementary BC Tripartite Initiative coordinating function and the extent of group procurement. Health Benefits In any case, none of these programs constitutes a proper healthcare system, since many of the services these groups receive are delivered through provincial and territorial healthcare systems, albeit in some instances funded by the federal government. xiv Kapelus M. Presentation to the Advisory Panel on Healthcare Innovation. Ottawa: First Nations and Inuit Health Branch: Health Canada; 2015. Correctional Service of Canada. 2014-15 Report on Plans and Priorities. Ottawa: Correctional Service of Canada; 2014. Available from: http://www. csc-scc.gc.ca/publications/092/005007-2602-eng.pdf; Citizenship and Immigration Canada. Report on Plans and Priorities 2014-15. Ottawa: Citizenship and Immigration Canada; 2014. Available from: http://www.cic.gc.ca/english/resources/publications/rpp/2014-2015/; Department of National Defence. 2014-15 Report on plans and priorities. Ottawa: Citizenship and Immigration Canada; 2014. Available from: http:// www.forces.gc.ca/assets/FORCES_Internet/docs/en/DND-RPP-2014-15.pdf; Health Canada, Report on Plans and Priorities 2014-15. Ottawa: Health Canada; 2014. Available from http://www.hc-sc.gc.ca/ahc-asc/performance/ estim-previs/plans-prior/2014-2015/report-rapport-eng.php . Report on Plans and Priorities 2014-15. Ottawa: Veterans Affairs Canada; 2014. Available from: http://www.veterans.gc.ca/ eng/about-us/reports/report-on-plans-and-priorities/2014-2015/ report/2-0#prog133

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Health Canada’s First Nations and Inuit Health Branch Prevention and Public Health (FNIHB) is a key provider and funder of health services for First Nations and Inuit communities, with an annual outlay Responsibility for public health is shared among all levels of nearly $2.6 billion, as depicted in figure 3.4. FNIHB of government, as well as the private sector, non-profit provides and/or funds a range of programs and services organizations, health professionals, and the public. The that supplement those provided by provinces and territories, Public Health Agency of Canada (PHAC) was created in including community-based health promotion and disease 2004 within the Health Portfolio to respond to the federal prevention programs, primary care services, programs to government’s “commitment to increase its focus on public control communicable diseases and address environmental health in order to help protect and improve the health and health issues, and health infrastructure support. FNIHB safety of all Canadians and to contribute to strengthening also oversees the Non-Insured Health Benefits program. public health capacities across Canada.”90 This program provides supplementary health insurance for First Nations registered under the Indian Act87 and The Public Health Agency of Canada, with expenditures eligible Inuit regardless of where they live. It covers exceeding $600 million in 2013-14, is broadly responsible medically necessary goods and services not covered by for: contributing to the prevention of disease and injury, private or provincial/territorial programs.88,89 as well as promoting health; enhancing surveillance information and expanding knowledge related to disease How these programs are delivered varies considerably and injury; providing federal leadership and accountability across communities. While FNIHB is responsible for the in handling national public health events; strengthening administration and delivery of these programs in some intergovernmental collaboration and national approaches First Nations and Inuit communities, other communities to public health policy/planning; and supporting are responsible for the administration of these health international collaboration in public health and the sharing services through contribution agreements and Health of Canada’s expertise.91 Service Transfer Agreements with FNIHB. The latter reflect alternative health governance arrangements that have been In their written submissions, some stakeholders and established either through land-claim agreements, or members of the public identified the need for a greater through other agreements reached between Aboriginal focus on disease prevention and health promotion, and communities and federal, provincial and territorial some also urged that the Public Health Agency of Canada governments.89 should play a larger role in these respects. The Panel, in response, observes that PHAC has a very broad mission. Given that these services fall directly within federal Local health units under provincial and territorial jurisdiction responsibility, the Panel felt it was important to engage are much more often engaged with healthcare providers with key stakeholders and advise if possible on strategies than the national agency can or should be. The underlying that might help address what are clearly pressing problems. issue – better integration of healthcare with community Members did so with trepidation in light of the significant health promotion and social development – is revisited in health challenges facing all Aboriginal communities, the subsequent chapters. evolving self-governance landscape, and the time constraints of their mandate. The healthcare arrangements for First Nations struck the Panel as particularly fragmented. Health-related Tax Policy This situation is a function of the number of self-governing First Nations, total population size and presence across A number of federal tax measures relate directly to the provinces and two of three northern territories, and healthcare.90 Federal tax measures are also in place to help diversity of living circumstances. That said, observations individuals and their families offset out-of-pocket healthcare and recommendations have been advanced that arguably costs that are not covered by public or private health can be generalized in some measure to healthcare for all insurance plans. Other federal tax measures are intended of Canada’s Aboriginal peoples. These are set out in to provide support for families caring for individuals at Chapter 6. home. In addition, sales tax exemptions are provided for: the services provided by certain healthcare professionals, medical devices and products, prescription drugs, and hospital parking. As well, hospitals receive a GST/HST rebate on eligible purchases.

32 | CHAPTER 3 — THE EVOLVING FEDERAL ROLE IN CANADIAN HEALTHCARE REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

More generally, the health sector benefits from certain In consultations, healthcare innovators and entrepreneurs broad-based tax measures. For example, pharmaceutical also emphasized the role of Export Development Canada companies benefit from the Scientific Research and and the Business Development as well as Experimental Development Program, which supports regional development agencies in supporting small and Canadian businesses in all sectors to conduct research and medium-sized enterprises in the health sector to develop development in Canada. Health sector charities and their and commercialize their products. diverse causes also benefit significantly from tax measures to support charitable giving.91 Although healthcare innovators do seek federal support through various economic development agencies and In the Panel’s view, health-related tax measures represent programs, the Panel concluded that federal departments, a significant outlay of federal resources that should be part notably Health Canada and Industry Canada, need to work of a federal healthcare innovation agenda. The role of tax together more closely to assist healthcare entrepreneurs. policy is explored in detail in Chapter 10. To recapitulate briefly, this chapter has offered an overview of the federal machinery in the healthcare field. It Economic Development in the Health emphasized that the Government of Canada has steadily Sector migrated away from the conditional cost-sharing arrangements that prevailed in the 1950s and 1960s. Today, During its consultations, the Panel heard about several the Canada Health Transfer is set to escalate in lockstep programs supporting healthcare innovation that are with GDP growth and has no conditions other than delivered through the industry portfolio: compliance with the Canada Health Act. Given this new reality, the patchy record of previous arrangements, and • The National Research Council attempts to bridge the the evidence of declining performance by Canada’s innovation gap between early stage research and healthcare systems, the question before the Panel rapidly development (R&D) and commercialization, focusing became: Is there a new model for strategic federal funding on socio-economic benefits for Canada and increasing that could build true collaboration, create a vision for national performance in business-led R&D and innovation, and break the current healthcare policy gridlock? innovation.92 Current health-related initiatives are focused on human health therapeutics, medical devices, This chapter’s review also summarized many federal and digital health. investments already in place across a range of areas linked to healthcare innovation, and highlighted a number of • The National Research Council’s Industrial Research lesser known federal levers. Thus, a related question for Assistance Program provides assistance in the form of the Panel was: can this machinery be part of the solution advice and funding to help small and medium-sized to Canada’s healthcare innovation gap? companies build their innovation capacity.93 These questions are addressed in Chapter 4. • The Networks of Centres of Excellence Canada is jointly administered by the three national granting councils (CIHR, Natural Sciences and Engineering Research Council, Social Sciences and Humanities Research Council), in partnership with Health Canada and Industry Canada. The aim is to create innovative partnerships that “mobilize Canada’s best research and development talent to build a more advanced, healthy, competitive, and prosperous Canada.”94

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34 | CHAPTER 3 — THE EVOLVING FEDERAL ROLE IN CANADIAN HEALTHCARE Chapter 4 Breaking the Gridlock

“Scaling up to meet the need is equivalent to when a large group of people must use a bus to undertake a crucial journey. If the bus is too small, or it goes too slowly, or it takes a wrong turn, or its mechanical problems are not fixed, or it is badly driven, it won’t reach its destination in time. Simply pouring in more fuel won’t resolve these problems. Governments and other players in the countries involved must deal with all the issues if the journey is to succeed.” 95

Bernard Rivers

“There should be a vehicle in place – a cheerleader – that would be willing to accept risks and potentially fail. This could be a credible and independent ‘Centre for Innovation’ in Canada to transmit on- the-ground lessons, versus high-level discussions, so that the wheel is not constantly being reinvented.”

Stakeholder Submission UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Breaking the Gridlock

The preceding chapters have presented good news and a crucial role in setting the vision and direction for change, bad news. The good news is that Canada’s healthcare and rewards those leaders for judicious use of their authority systems have formidable assets: a dedicated and well- to support the testing and scaling-up of promising ideas trained workforce, that, along with reputable institutions from any source. and agencies, delivers care to countless Canadians every day; a societal consensus on the value of making health Earlier chapters have emphasized the growing momentum services available to all Canadians on the basis of need; for bottom-up innovation across Canada. The Panel also and a strong spirit of innovation at all levels of every system. heard about supportive top-down approaches across the Chapter 3 further illustrated that, notwithstanding country, with system leadership in multiple provinces that constitutional realities and political conflicts, Canadian showed a commitment to accelerating innovation on the governments have often worked around the existing ground. These are promising developments. constraints to create new funding arrangements, necessary partnerships, and supporting national machinery. At the same time, the Panel members were taken aback by the extent to which stakeholders focused on small That said, the bad news is that our performance is slipping differences between jurisdictions, regions and institutions. in international league tables. Substantial numbers of Whereas leaders of high-performing healthcare systems Canadians are concerned about the state of healthcare in are open to adopting or adapting well-proven innovations their respective jurisdictions. We are paying a lot for a from anywhere, some Canadian leaders seemed stricken relatively narrow bundle of publicly-insured services. with the “Not Invented Here syndrome” described in Although there are many great ideas in circulation and Chapter 2. The Panel’s conclusion was that positive changes extraordinary pockets of innovative activity across the in Canadian healthcare systems could be accelerated by country, Canada has not been successful in mobilizing mechanisms that challenge our propensity to reinvent the large scale change at the system level. healthcare wheel, city by city, and region by region. As the following review of wider pressures for change indicates, This chapter accordingly examines some of the forces Canada is too short on both time and money to continue shaping healthcare, in two respects: how innovation is indulging in healthcare parochialism. fostered in high-performing healthcare systems, and what global trends are forcing even more rapid-cycle innovation in healthcare. Above all, the chapter sets out the rationale Turning Challenges into and substance of a set of recommendations that the Panel Opportunities for Change views as essential to creating a new model of inter- jurisdictional and multi-stakeholder collaboration, leading The challenges facing Canada’s healthcare system are not to improved scaling-up of innovation and, in time, much materially different from those facing high-performing stronger healthcare systems for all Canadians. systems in other countries. The difference is that high- performing systems are able to leverage these pressures into opportunities for change. Bottom-up and Top-Down Innovation In this respect, the Panel sees the following challenges facing Canada’s system as key opportunities for innovation: To assist in its deliberations, the Panel had the benefit of digesting a large number of scholarly reports on high- • Patients want “in.” As society becomes less hierarchical, performing healthcare systems, and as noted earlier, patients want to take charge of their health and spending a day with leading experts from the UK, the US healthcare. They increasingly see themselves as (Kaiser Permanente), Australia, the Netherlands, and partners in their own care and are less willing to accept Denmark. These inputs led to a simple but useful insight. poor customer service, including communication gaps Every high-performing healthcare system encourages and outdated communication technology, long waiting front-line staff to innovate on a bottom-up basis. Every times, and poorly integrated services. They expect to high-performing system also depends on leaders to play interact with a responsive system that is designed

36 | CHAPTER 4 — BREAKING THE GRIDLOCK REPORT OF THE ADVISORY PANEL ON HEALTHCARE INNOVATION

around their needs, not around the needs of providers system remains organized in silos. A more integrated and system managers. While these expectations system that can effectively wrap itself around the needs increase the pressure on providers and systems, they of the patient could deliver better care and better also provide an opportunity to give patients greater outcomes at a lower cost – not just for seniors, whose responsibility for their own health and healthcare. growing numbers may propel the change, but for all This, in turn, can be leveraged to improve quality and Canadians. potentially reduce the cost of care. • The digital revolution is now disrupting healthcare. A • Canada’s population is changing rapidly. Nearly one vast amount of health-related data is being generated quarter of Canada’s population is projected to be over on a daily basis in Canada through clinical encounters, the age of 65 in 2036,96 with significant variation across administrative processes, and clinical research provinces and territories. , in activity. With the rapid pace, spread and reach of particular, is aging at a faster pace than the rest of the information and communications technologies – such country. At the same time, the prevalence of many as remote monitoring, mHealthxv tools, and ‘wearables’ diseases increases with age, suggesting that as the – information about health and healthcare will grow population grows older, the burden of chronic illness exponentially. This offers potential for smarter clinical will also rise97,98,99 decision-making, better research and evaluation, and more informed and engaged patients. However, While seniors are most often front and centre, there it also requires critical supports in order to channel are other demographic trends to consider. In some and focus this deluge of data into actionable provinces (e.g. Manitoba and Saskatchewan) the intelligence that patients, providers, and system absolute numbers and relative proportions of Aboriginal decision-makers can use. peoples are expanding rapidly.100 One in four children in Canada is now overweight or obese, increasing Similarly, society’s knowledge and understanding of lifetime risks for many chronic health conditions.101 disease is rapidly changing thanks to new developments Some see these demographic and disease trends as a threat to the sustainability of the healthcare system. However, they are only a threat to sustainability if the xv Mobile health.

Figure 4.1: Population 65 Years and Over, by Region, 2011 and Projected 2036 (%)

14.4% Canada 23.7% 15.8% NL 31.0% 15.8% PE 27.4% 16.5% NS 28.6% 16.2% NB 29.4% 15.7% QC 25.1% 14.2% ON 23.1% 13.9% MB 21.4% 14.6% SK 23.3% 10.8% AB 21.0% 15.3% BC 23.8% 8.8% YT 19.6% 5.6% NT 20.1% 3.2% NU 10.8%

0% 5% 10% 15% 20% 25% 30% 35%

Year 2011 Year 2036

Source: Adapted from Employment and Social Development Canada calculations based on . Estimates of population, by age group and sex for July 1, Canada, provinces and territories, annual (CANSIM Table 051-0001); and Statistics Canada. Projected population, by projection scenario, sex and age group as of July 1, Canada, provinces and territories, annual (CANSIM table 052-0005). Ottawa: Statistics Canada; 2011.

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in biotechnology. Precision medicine heralds a new Chapters 5 through 9 delve into each of these areas in era for diagnosing, treating and preventing disease further detail and set out recommendations to the federal that will move away from a ‘one size fits all’ strategy government. But knowing where to focus is only part of to a more individualized approach based on a patient’s the challenge. Knowing how to move forward is the other, genetic makeup. It offers an opportunity to dramatically perhaps more challenging task. improve the effectiveness of healthcare by pinpointing the right treatment at the right time in the right dose with reduced side-effects and maximum efficiency. Towards a More Productive The incorporation of this new paradigm into Canadian Environment for Collaboration healthcare must be swift, strategic, and, where appropriate, sceptical, so that we can maximize its As discussed in Chapter 3, there have been highs and benefits in a cost-effective manner. lows in collaboration on healthcare across the federation. When the federal government announced in December • The era of rapid growth in healthcare spending is over. 2011 its plan to unilaterally renew the Canada Health Federal transfers are moving to a formula driven by Transfer (CHT) for the period of 2014 to 2024, thereby GDP growth, and provinces and territories have reined pre-empting intergovernmental negotiations on a new in spending. 102 Some critics view this as a heavy-handed health accord, provinces and territories were tactic by governments to fund tax cuts on the backs of understandably stunned.104,105 The immediate result was healthcare providers and patients. This shift, however, retrenchment on the part of provincial and territorial can also be viewed as an opportunity to introduce governments. If the federal government was not going overdue changes, i.e., changes in payment models that to engage with provinces and territories to discuss how reward value rather than volume; changes in how drugs renewal of health transfers could be linked to healthcare and medical devices are regulated, reimbursed and renewal, then provinces and territories would go it alone. managed; and changes to help healthcare systems become leaner, more productive, and less wasteful of Under the auspices of the Council of the Federation, tax-payer dollars. Canadians also face increasing direct provinces and territories created the Health Care Innovation financial pressures as the system shifts towards goods Working Group in 2012. This group was initially chaired and services – such as drugs, devices, and home care by the premiers of Saskatchewan and PEI and its – that fall outside the traditional Medicare envelope. membership was comprised of provincial and territorial Out-of-pocket expenditures for health have risen from health ministers. It quickly created theme groups to focus $277 per capita to $840 over the past two decades, on team-based models and scopes of practice, clinical representing a 4.7 percent annual growth.5 This practice guidelines and health human resources. It next presents an opportunity to innovate in how we finance produced a comprehensive report in 2012 profiling best care beyond hospitals and physician services. practices across jurisdictions, and identifying priority areas for further work.106 Currently, the Working Group is • Healthcare has become both a social program and an focusing on three areas for collaboration: pharmaceuticals, economic asset. The health sector directly and indirectly appropriateness of care and seniors’ care.107 supports more than two million workers in hundreds of communities across the country,103 oversees The pan-Canadian Pharmaceutical Alliance (pCPA) has sophisticated infrastructure and procurement of already emerged as one of the key outputs. pCPA is advanced technology, and supports leading-edge undertaking joint provincial/territorial negotiations for research with significant commercial potential. In brand name drugs in Canada, and getting better value for Canada, the notion of partnering with the private sector provincial and territorial drug plans. to improve the healthcare system has gained little traction. Some see this as anathema to the underlying On the one hand, the decisive actions taken by provinces values of Canadian Medicare. Others see the potential and territories may be seen as a validation of the federal to reap economic benefits for Canadians while improving government’s shift in strategy. Growth in provincial and the quality and sustainability of the healthcare system. territorial health spending has dropped to levels not seen Leading systems in other countries are taking the latter since the mid-1990s.5 Significant savings have been position, and Canada should follow suit. achieved in the pricing of generic and brand name drugs.108 Experiments with novel payment mechanisms

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are finally and urgently being undertaken, and in some Apart from these pragmatic considerations, engagement jurisdictions the scope of practice of non-physician by the federal government might facilitate the development providers is expanding. of a shared vision for reform. Obviously, such a vision must respect jurisdictional responsibilities and sensitivities. On the other hand, this new incarnation of ‘two solitudes’ On the other hand, as noted earlier, going it alone in strikes the Panel as suboptimal – and likely to disappoint making fundamental changes to healthcare is a daunting those Canadians who expect their governments to political challenge. Moreover, a national vision could give collaborate in solving pressing national problems. voice to the legitimate expectations of Canadians for a suite of healthcare systems that deliver excellent and The first limitation of the current provincial/territorial reasonably comparable services across the country. approach is that it requires time, effort, and money that may be in short supply. Convening meetings, commissioning studies, and engaging stakeholders is costly and time- Healthcare Innovation Fund consuming. It is challenging for provinces and territories to do this at the national level, not least because, as one For reasons already given, the Panel heard persistent calls from deputy minister told the Panel, “the clinical lion feeds first.” stakeholders across the country for a national strategy along Apart from the primacy of local service demands, there with concrete action to support and accelerate innovation in are also sharp inter-jurisdictional differences in size and Canada’s healthcare systems through creation of a catalytic scope for these activities. fund. After extensive deliberation, the Panel concurred that a protected source of capital that dedicates funds toward Second, joint work is targeted to select areas where there innovation is not only desirable but essential to sustain is full agreement among provincial and territorial momentum for change across jurisdictions. Accordingly, the governments to move forward. As a result, the scope of Panel is recommending the creation of a multi-year Healthcare activity may be narrow relative to the extant challenges, Innovation Fund. and collaborations between subsets of jurisdictions are not supported under this model. The overall aim of the Healthcare Innovation Fund would be to enhance the quality and value of healthcare provided A final limitation is that there is no available source of to Canadians, while improving the performance of long-term working capital. Cost pressures are sufficiently Canada’s healthcare systems as measured against their intense that jurisdictions may be challenged to free up international peers. To provide predictable funding and funds apart from those focused on the realization of time for major initiatives across multiple jurisdictions, the immediate results. On a related point, although various Panel believes that the Fund should be created with an provinces have provided ad hoc support for the activities initial term of ten years. of the Health Care Innovation Working Group, it seems more than likely that these efforts could move much faster with stable personnel and dedicated funding. “The federal government should establish a National Health System Innovation Fund In short, the existing provincial and territorial collaboration targeted to provinces and territories to support for healthcare innovation is a positive step, and could be greatly accelerated by increased federal engagement on the adoption of health system innovations. two practical levels. The federal government has the ability Funding criteria should be designed to not to fund longer-term machinery at the national level to support the creation of partnerships and ‘coalitions of the only support the development of these willing.’ It can also mobilize resources to support innovations but to incent their adoption on a experimentation, evaluation and scaling-up in a more scaled-up basis.” systematic and efficient fashion. Stakeholder Submission

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A federal Healthcare Innovation Fund would therefore be has been missing in Canada is a pool of funds to support positioned to act as a strategic investor with a long-term change agents as they seek to develop and implement view. It would support coalitions of willing partners from both incremental and disruptive innovations in the various sectors – i.e. federal, provincial and territorial organization and delivery of healthcare. governments, patients, providers, and industry representatives – in developing, testing, and evaluating The Panel emphasizes in this regard that the creation of new models of care. In keeping with widespread concerns CIHR has been a very significant achievement. As described about fragmentation of accountability and budgets in in Chapter 3, CIHR’s mandate was built around a wider healthcare, an obvious priority would be large-scale scope for academic inquiry than its predecessor organization. demonstrations that promote integration of care and CIHR was also expected to do some bridging from research remove structural barriers to innovation. A second critical to development through initiatives in knowledge translation focus would be support for the further adaptation, spread and commercialization. However, CIHR was never and scaling-up of the most promising ideas and approaches intended to engage in non-academic scaling-up of to improving Canadian healthcare. innovation, or to pursue the type of iterative evaluation of payment models undertaken by the US Center for Medicare The Panel understands that many of the best prospects for and Medicaid Innovation. CIHR’s SPOR initiative, as noted investment will come from those on or near the front-lines earlier, now has exciting projects underway that bridge of healthcare. Other ideas, however, may come from research and development. It thereby bolsters what is a examining healthcare systems at the proverbial 35,000-foot woefully under-invested field in Canada, and does so in level, or by studying international successes. While positive partnerships with provinces and territories. priorities for the Healthcare Innovation Fund will therefore However, the investments remain modest, and debate evolve over time, the Panel has made a number of initial understandably continues among stakeholders as to how recommendations for high-impact initiatives that can much support CIHR should direct to this type of accelerate work within each of the innovation themes development, let alone innovation and implementation, highlighted in Chapters 5 through 9. as opposed to primary academic research.

Indeed, coinciding with the creation of CIHR, the pragmatic “What we’d like to focus on is, over and above the front-line work to apply new knowledge to practice and transfer, is the federal government going to be policy-making was explicitly hived off to a new but small agency called the Canadian Health Services Research interested in partnering with provinces on Foundation. The Canadian Foundation for Healthcare outcomes-specific innovations that we propose?” Improvement (CFHI), described in Chapter 3, is the direct successor and latest incarnation of that effort, with a budget Saskatchewan Premier Brad Wall, of approximately $10 million per year – 0.005% of total January 2012 healthcare spending in Canada. CFHI punches above its weight in scaling up innovation but has nothing like the required heft to transform Canada’s healthcare systems. Taber J. Brad Wall prescribes collaborative federalism to improve healthcare. Globe and Mail; 2012 Jan. http://www.theglobeandmail.com/news/politics/brad-wall- All things considered, the Panel had no trouble concluding prescribes-collaborative-federalism-to-improve-health-care/article1358383/ that the goals to be accomplished through creation of a Healthcare Innovation Fund are not remotely achievable The Panel has also carefully considered the nature and within any existing research agency’s mandates, machinery sources of funding, the scale of investment, general or relevant budgets. To repeat: the Fund’s primary operating principles, and modes of oversight for this new rationale is to support activities that lead to scalable initiative. It begins by observing that every successful improvements in healthcare, not to generate academic knowledge-based enterprise makes strategic investments research. That said, experience in the US and UK suggests in research, development, and innovation. The challenge that secondary academic partnerships and by-products in the health sphere internationally has been that research may well occur, as work unfolds to reinvent aspects of tends to draw the largest share of support, development front-line healthcare. Partnerships with SPOR, as noted follows at some distance, and funding of front-line in Chapter 3, are very likely to be mutually advantageous. innovation is often an afterthought. In like fashion, what

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Additionally, the Panel stipulates that the Healthcare The Panel therefore concludes that existing sources of Innovation Fund should not support provision of currently funding can make only a very limited contribution, and insured healthcare services nor should its resources be substantial new federal funding is required to create a allocated on the basis of formulas currently or previously robust Healthcare Innovation Fund and grow it over time. used to govern pilot project funding or transfers to provinces. Rather, allocations from the Fund would result The next question for the Panel was the scale of investment from rigorous adjudication against a set of transparent needed. The Panel’s deliberations on this front were specifications and goals as set out above. Flow of funds, informed by its international research and discussions, moreover, should be conditional on commitments by examination of the scope and merits of previous federal partners to sustain successful demonstrations, and on investments, and consideration of private sector approaches. meeting milestones. The results from and return on these investments should be assessed against those milestones First, international research demonstrates that all efforts and reported publicly. to galvanize large-scale changes in complex healthcare systems are costly. There is no one-size-fits-all solution The Panel also considered potential sources of funding. as different healthcare systems have different structures and levers on which to pull. Nonetheless, the Panel did Reallocation of current investments in federal health consider the relative size of innovation allocations in other transfers was ruled out for obvious reasons. Pressing CIHR countries. As one bellwether, the Center for Medicare and to direct more funds to front-line healthcare innovation Medicaid Innovation in the US received an appropriation struck the Panel as wrong-headed on three scores. First, of US$10 billion under the Patient Protection and Affordable CIHR rightly has academic DNA – and diffusing its focus Care Act (2010) for 2011-2019. That Center, as described is unhelpful. Second, a team with very different skills will earlier, is driving a highly innovative agenda of payment be required to oversee the disbursement of the Fund, to and organizational reforms in US publicly-financed health support a range of innovators at a remove and on the services. While some of its funds flow into direct support front-lines, and to assess on investments from of experimental models, the Center is able to leverage the Fund. (A means to build this capacity is set out below.) significant resources through its position inside the Centers Third, CIHR’s investigative community is already facing for Medicare and Medicaid Services, the federal intense global competition. For example, in the UK, the administrator of the massive operating budgets (about Medical Research Council spent £845.3 million ($1.6 US$1 trillion in 2013) for those programs. The Innovation billion) in 2013-14, while the Wellcome Trust disbursed a Center is also able to leverage datasets and expertise from further £674 million ($1.287 billion), both with priorities the nearby Agency for Healthcare Research and Quality; similar to CIHR’s. in 2015 the latter agency has a budget of US$465 million.

The Panel is aware that provincial and territorial Despite these resources, as noted in Chapter 2, the governments provide matching funds for programs such Innovation Center is struggling to scale up some of its as SPOR and Infoway. Such matching arrangements could models. This point underscores the challenge Canada faces. well continue to the extent that the Healthcare Innovation Even with provinces and territories providing substantial Fund becomes a co-funding vehicle with SPOR or the support in kind, additional investments will be needed in primary federal funder for digital health projects (see below) some cases to move new models of care from demonstration undertaken in partnership with provinces and territories. projects into usual and customary practice. However, implementing and evaluating front-line innovations in healthcare delivery – and even more Further comparators are hard to find. The UK, for example, significantly, scaling up these efforts – will invariably operates differently on two levels. First, changes in NHS require significant in-kind contributions from provincial operating models are often driven top-down by and territorial healthcare systems. The Panel members administrative fiat. Second, the talent and machinery to accordingly caution against building in rigid cost-sharing respond to these shifts is being developed through the provisions that could undermine the objectives of the Fund relatively new National Institute of Health Research. and preclude collaboration. Created in 2006, this entity does fund some translational research and clinical trials. However, it is overwhelmingly focused on building capacity for applied research that will improve care in the NHS. Its broad scope also includes

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activities similar to some of the pan-Canadian healthcare For further benchmarking, the Panel considered how the organizations reviewed in Chapter 3. In 2013-14, the private sector approaches research, development, and NIHR’s turnover was £1,014 billion, or $1.935 billion.xvi innovation. It is not unusual to see knowledge-intensive global companies devote 10 percent of revenue to these From the standpoint of domestic precedents, the Panel observes three domains. In contrast, the most recent estimates that the federal government has used targeted funds on suggest that health-related research and development multiple occasions over the past 15 years to support healthcare expenditures account for about three percent of total health reform and renewal. The size and nature of these investments sector expenditures,109 with the lion’s share of these provides a useful benchmark for the Healthcare Innovation resources invested in basic medical and clinical research Fund. The most significant of these initiatives, in descending performed by academic investigators, and in pharmaceutical order of value, are shown in Figure 4.2. Most of these initiatives research and development by the private sector. None of were targeted to a specific dimension or sector of healthcare. these expenditures have goals comparable to those In contrast, the Healthcare Innovation Fund is intended to proposed for the Healthcare Innovation Fund. support a broad portfolio of investments and requires a wider funding base. The closest analogue is accordingly the Health Next, the Panel considered the types of projects that the Reform Transfer ($3.2 billion/year). As well, many of the above Fund would support. The amounts available annually initiatives were intended to support service delivery and were would need to be large enough to catalyze the scope and therefore allocated to jurisdictions on a per capita basis. In breadth of activities identified elsewhere in the report, contrast, since the Healthcare Innovation Fund is intended to including multiple large scale cross-sectoral demonstration act as a catalyst for fundamental change, the Panel has, as projects, investments in digital health and implementation noted earlier, rejected formula-based allocation in favour of of precision medicine, and scaling-up across jurisdictions a more strategic approach involving rigorous adjudication, of diverse programs to improve healthcare. milestones, conditional funding and reporting so that the impact of taxpayers’ funds will be maximized. Putting all these elements together, the Panel has concluded that, once a steady state is reached, outlay for a Healthcare Innovation Fund should be set at xvi The closest analogue to NIHR in Canada is Alberta Innovates – Health Solutions, with a budget in 2014-15 of $95.9M. $1 billion per annum. This will mirror the current federal

Figure 4.2 Federal Support for Healthcare Reform and Renewal since 2000

Amount Description Health Reform Transfer $16 billion Disbursed to provinces and territories from 2003-04 to 2007-08 to support improved over 5 years access to primary care, home care, and catastrophic drug coverage (this fund was merged into the Canada Health Transfer in 2005-06) Wait Times Reduction Fund $5.5 billion Disbursed to provinces and territories between 2004-05 and 2013-14 to support over 10 years strategies to reduce wait times in five priority areas Medical Equipment Fund/Diagnostic and Medical Equipment Fund $2.5 billion Disbursed to provinces and territories on a per capita basis to support the purchase of over 5 years diagnostic and medical equipment from 2000-01 to 2005-06 Canada Health Infoway $2.1 billion Allocated to projects on the basis of merit with cost-sharing requirements and no predetermined jurisdictional shares

Primary Health Care Transition Fund $800 million $560 million allocated on a per capita basis to support jurisdiction-specific projects and over 5 years the remaining $240 million allocated to cross-jurisdictional initiatives

Patient Wait Times Guarantee Trust $612 million $112 million in base funding of $10 million per province and $4 million per territory, and the over 3 years remaining $500 million allocated to provinces and territories on a per capita basis from 2007-08 to 2009-10 to support the adoption of wait time guarantees across jurisdictions

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investment in research through CIHR of $1 billion per for the federal government: it disentangles Ottawa from annum. An annual investment of $1 billion also represents programs that it does not manage, while giving the half of one percent (0.5 percent) of total health expenditures provinces and territories responsibility for hard choices, in Canada, which are estimated at $215 billion for 2014. e.g., make unpopular tax hikes, and/or cut other social Moreover, it is an even smaller fraction of the total federal programs and/or rein in healthcare spending. However, budget, which in 2014 was $280 billion -- $250 billion of as many stakeholders observed, that approach may also which was in program spending. be a prescription for further inter-jurisdictional wrangling, a continued decline in the quality of Canada’s healthcare The Panel recognizes that the proposed approach is novel. systems, or a retreat from the core principles of Canadian Funding will flow in meaningful measure based on Medicare. It seems very likely that Canadians will initiatives identified by coalitions of willing partners rather justifiably call not only provincial governments but the than traditional per capita transfers negotiated through Government of Canada to account if any of those formal federal, provincial, territorial discussions. Unlike developments were to ensue. systems such as the NHS with its unitary corporate structure, or the US where the federal role is much stronger, Canada’s highly decentralized arrangements mean that it A Healthcare Innovation Agency will take time to build coalitions across jurisdictions and stakeholders, as well as to develop sound plans for projects The Panel carefully examined a range of options for and initiatives. Thus, while a case may emerge over time overseeing the administration of the Healthcare for an even more sizeable investment, the Panel endorses Innovation Fund and an agenda of major change in a prudent approach wherein investment in and by the Canadian healthcare, supported by the Fund. Key Fund ramps up gradually. A gradual ramp-up not only considerations included the need to avoid creating new reduces the risks of suboptimal early spending as sometimes pan-Canadian machinery that would add to the already occurs with new programs and agencies. It also allows for extensive array of pan-Canadian healthcare organizations, creation of a new federal agency that will provide an and the need to have a governance mechanism that oversight mechanism to ensure responsible allocation of would be removed from the cut and thrust of inter- the funds and be a resource to accelerate innovation across jurisdictional decision-making. all of Canada’s healthcare systems. In sum the Panel recommends that funding ramp-up commencing in 2015- 16, with a view to reaching an outlay of $1 billion per “The federal government must play a leadership annum within four to five years. role in collaborating with jurisdictional counterparts in the formation of a pan-Canadian The Panel’s recommendation of a substantial investment has been made with due regard to the current economic health mechanism to identify, promote and context. As noted in chapter 3, the federal government’s advance needed healthcare innovation.” decision to reduce the rate of growth of the Canada Health Transfer from six percent per annum to the nominal GDP Stakeholder Submission growth rate starting in 2017-18 opened the door to a new model for inter-jurisdictional collaboration. It also provided the Federal Government with some fiscal capacity for reinvestment in healthcare. This Fund can accordingly be The Panel looked at the existing array of pan-Canadian seen as the bookend to the 2011 decision. health organizations to ascertain whether one of these organizations might be well positioned to oversee the On that latter note, the Panel reiterates that the Government proposed Healthcare Innovation Fund. The most obvious of Canada in two momentous steps induced all provinces candidates were the Canadian Foundation for Healthcare to adopt universal healthcare programs through cost- Improvement (CFHI), Canada Health Infoway, and the sharing provisions. Given the frustrations of fiscal Canadian Patient Safety Institute (CPSI). The Panel’s federalism and size of the previous escalator in a period assessment is that while each of these organizations has of slow economic growth, the Panel understands the logic considerable strengths, none has the governance, size, and of capping the Canada Health Transfer to match GDP expertise needed to oversee a large-scale fund that supports growth. That approach also has immediate advantages system-wide improvement.

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The Panel is therefore recommending the creation a new Canada’s healthcare systems as measured against their agency that will fold in the expertise and focus of CFHI, international peers. CPSI and eventually Canada Health Infoway. The inclusion of the first two of these fine organizations reflects the fact To ensure that a shared vision, broad strategy, and that healthcare improvement, quality and safety would innovation goals can be adapted to the evolving healthcare both be core to the mandate of the new organization with context, HIAC would have a healthcare forecasting and the addition of a much more significant focus on scaling planning stream. As discussed further in Chapters 8 and up and spreading innovations. An orderly wind-down of 9, it would house a Healthcare Innovation Accelerator CFHI and CPSI would enable the appropriate transfer of Office. This Office among other roles would facilitate the staff and budget lines to a new Healthcare Innovation more rapid adoption of healthcare innovations that promise Agency of Canada (HIAC).xvii high-impact in terms of quality and cost-effectiveness. Finally, given the gaps in health services and outcomes As for Canada Health Infoway, the Panel’s assessment is between First Nations and Inuit and the rest of Canadians, that it should remain in place as a separate entity only to HIAC would link closely with the work of the First Nations complete its current mandatexviii or until the Fund and Health Quality Council and any related Inuit liaison new Agency are established. Infoway can claim an committees, as described in Chapter 6. important legacy of building essential foundations for electronic health record-keeping. With the rapid shifts in To carry out this work, HIAC would have resident expertise information technology and a greater emphasis on in core areas such as: innovation spread and scale-up; quality meaningful use of those tools, the playing field has improvement and patient safety; health data analytics; and changed, and a more integrated approach seems timely. digital health. Staffing must be lean, but benchmarking in Thus, the Panel is recommending that any new federal that regard should be done with care. On the one hand, support for eHealth projects beyond existing commitments the staffing and related overhead costs of excellent grant- would flow through the Fund, and that Infoway should making bodies are typically five percent of their total annual fold into the Agency within two to three years. The Panel budgets in steady state. On the other, the new Agency’s has elaborated on its perspective on Infoway and eHealth mandate is sharply different from, say, CIHR. It is concerned more generally, in Chapter 7. not with making grants and awaiting the eventual publication of results, but facilitating timely and meaningful change in The Agency would work with a range of stakeholders and policy, in system design, and in front-line practices. This governments to frame a practical agenda for improved work is informed by research, but it is not research. As such, care and value, along with healthcare innovation goals the Agency must be results-driven, and engaged closely across the Panel’s proposed five areas of focus. As noted with partners to effect improvements in healthcare. The above, the core operating budget for the Agency would be flow of analysis, writing, and consultation will be continuous. drawn from the Healthcare Innovation Fund. The Agency This presumably explains why higher levels of internal would also provide oversight and expertise for deployment spending are seen in entities like the Center for Medicare of the Fund to projects on the front-lines of healthcare. and Medicaid Innovation. All uses of the Fund, and the work of the Agency, should seek to advance the twin goals of removing structural The Panel notes further that many of HIAC’s staff will be barriers to innovation in Canadian healthcare, and on the road frequently to work alongside partners on major supporting spread and scale-up of proven models and projects. This suggests that a multi-nodal structure may modalities of care. The Agency’s mission, exactly as for be appropriate – and would also send a collaborative the Fund, would be to support on-the-ground efforts to message to provinces and territories. enhance the quality and value of the healthcare provided to Canadians, while improving the overall performance of The Panel foresees that international recruitment will be essential to ensure that the leadership of the Agency has both relevant experience and a willingness to challenge xvii This moniker is a placeholder for clarity. Given the unified purpose and likely Canadian healthcare dogma and risk-averse attitudes. co-governance of the Fund and Agency, the term Health Innovation Canada might be appropriate as a joint name for both initiatives. Above all, the culture of the Agency should be one of

xviii In addition to completing existing Infoway projects, some legacy activities partnership with, support for, and facilitation of the work could be considered for support from the Innovation Fund to provide a further of a range of stakeholders who bear the primary brief window of opportunity to jurisdictions that have lagged in info-structure development. responsibility for delivering healthcare to Canadians.

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Provinces and territories would obviously be key In sum, Canadians have every right to expect excellent partners. At the same time, priorities for the Agency care and better value for the money they spend on and the Fund cannot be set by jurisdictional vote- healthcare, and to ask that all jurisdictions and providers counting, by political posturing, or by expectations that collaborate fully to that end. A new model of collaboration these instruments will serve fire-fighting and first- is particularly important at this juncture when Canada’s responder functions for regional flashpoints. To repeat healthcare systems face significant pressures. As noted, a point made earlier, the Agency’s work should be driven those pressures also present significant opportunities by pressing priorities of wide relevance to the health for innovation. A federal commitment to provide services and health status of Canadians, and implemented meaningful working capital in the form of a Healthcare by broad coalitions of the willing. Innovation Fund, combined with national machinery that consolidates existing organizations, would serve as HIAC would be established as an arm’s length organization, a critical catalyst for improvements in healthcare. Bold budgeted through the Healthcare Innovation Fund by the steps in this regard would have the further benefit of federal government. Its corporate structure should enable resetting the federal-provincial-territorial dynamic it to provide robust, independent oversight and direction around healthcare, and restarting a working partnership for the Fund. The Agency would be governed by a group based around the needs of Canadians. of eminent Canadians, supported by one or more advisory committees composed of representatives of a range of The next five chapters explore five priority areas of stakeholders (provincial/territorial governments, patients, innovation for Canada. In the Panel’s opinion, these should providers, industry, and others). be taken as priority areas for the new federal Healthcare Innovation Fund and new Healthcare Innovation Agency There are two potential models of governance for HIAC. of Canada. One would be to create the Agency as a federal government entity similar to CIHR, at arm’s length from the Minister but still within the federal administration and subject to Recommendations to the Governor-in-Council or ministerial appointments to the Federal Government governance body. The second approach would be to create a not-for-profit corporation similar to other pan-Canadian healthcare organizations with the federal government as 4 1. Starting in 2015-16, create a ten- the main funder. year Healthcare Innovation Fund with

Both options have strengths and weaknesses. A standard a gradual ramp-up, ideally reaching federal agency could present advantages in terms of forging steady-state by 2020 . ahead and accountability for a substantial budget. However, this structure runs the risk of being perceived as too close • The Fund’s broad objectives would be to effect to the federal government and too far from provinces and sustainable and systemic changes in the delivery of territories. A not-for-profit corporation would be able to health services to Canadians. Its general goals would flow the funds more quickly as well as work more easily be: to support high-impact initiatives proposed by and directly with a range of stakeholders. However, it could governments and stakeholders, to break down also be more easily captured by inter-jurisdictional politics, structural barriers to change, and to accelerate the with subsequent redirection of priorities and allocation of spread and scale-up of promising innovations. funds. A hybrid may be feasible so long as two objectives are kept front and centre. First, the board must be truly • The Fund will not be allocated on the basis of any independent and non-partisan, ideally with some existing transfer formulae, nor will its resources be international members. All members must be seen to have used to fund provision of health services that are substantial and relevant qualifications. The slightest whiff currently insured under federal, provincial and of cronyism or box-tick appointments will kill the credibility territorial plans. Funds will be allocated on the basis of the exercise from the outset. Second, howsoever the of rigorous adjudication against transparent organization is structured, a very high priority must be the specifications, having particular regard for measurable creation of a constructive climate for change and for impacts on health outcomes, creation of economic and renewed collaboration. social value, sustainability, scalability, and commitment

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of relevant stakeholders to sustaining successful • The Agency should be an arm’s length organization, initiatives. funded by the federal government. It should be governed by a group of eminent Canadians, who would • The annual outlay from the Fund should rise over time be supported by one or more advisory committees towards a target of $1 billion per annum, derived composed of representatives of a range of stakeholders primarily from new federal commitments. (provincial and territorial governments, patients, providers, industry and others). Its corporate structure • The Fund’s initiatives will be grouped under five should enable it to provide robust, independent priority themes: oversight and direction for the Fund.

οο patient engagement and empowerment • The Agency should catalyze and coordinate collaboration with the pan-Canadian health agencies οο health systems integration with workforce and the Canadian Institutes for Health Research to modernization ensure alignment of activities.

οο technological transformation via digital health and precision medicine 4 .3 Shift funding and staff for both the Canadian Foundation for οο better value from procurement, reimbursement and regulation Healthcare Improvement and the Canadian Patient Safety Institute to οο industry as an economic driver and innovation the new Healthcare Innovation Agency catalyst of Canada .

4 .2 Create the Healthcare Innovation • This recommendation reflects the relevance of the Agency of Canada to work with a range mandates of both organizations to the promotion of healthcare innovation. It will also reduce duplication, of stakeholders as well as governments provide some economies of scale for the federal to set the long-term vision for the government, and streamline a crowded pan-Canadian healthcare system and healthcare health organization field. innovation goals across the Panel’s proposed five areas of focus . 4 .4 Continue Canada Health Infoway pro tem as a separate organization with • The Agency should provide oversight and expertise for the Fund, in keeping with the twin goals of staffing to complete projects currently removing structural barriers and supporting spread underway . Once the new Agency is and scale-up, with the long-term aim of improving established, fold relevant functions Canada’s standing internationally on key metrics of health system performance. from Infoway into the Agency, and flow future federal funding for digital health through the Innovation Fund .

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Patient Partnership, Public Empowerment

“When you have a serious chronic illness, like I do, you have to see specialists in . They never seem to have the full picture and as a result I feel responsible for keeping my own record to carry to each of these appointments. They don’t trust the documents I carry but currently I am working with a family doctor, a rheumatologist, a respirologist, a gastroenterologist and a cardiologist. Yet, when I get into trouble, I end [up] in the emergency room and they always want to know why I did not go and see my own doctor…you can’t win as a patient. I wish they would all get in the same room at the same time, with me present, and talk about what is going on and what the best plan of care should be.”

Public Submission

“Too often the customer service motto in healthcare seems to be… ‘we aren’t happy until you aren’t happy’”

Participant at Regional Consultation UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Patient Partnership, Public Empowerment

In the Panel’s consultations, an unsettling theme recurred Patient-centred Care: Ideal and Reality often across the country. Not just patient advocates, but Patient-centred care has been defined as “care that is professionals, administrators, and policymakers expressed respectful of and responsive to individual patient concern about an increasingly complex and disjointed preferences, needs and values,” wherein “patient values system that frustrates the best intentions of providers and guide all clinical decisions.”111 Healthcare professionals projects a fundamental lack of respect for patients and might reasonably argue that their goal has always been to their families. One stakeholder observed that untold deliver patient-centred care. Literature to that effect billions of dollars of productivity are lost each year in certainly dates back centuries. Recent incarnations of this Canada as citizens sit idle, waiting to see doctors in ancient ethos began in the 1980s111 amidst concerns about and offices. Patients also complained of feeling that they the rising complexity and increasing discontinuity of were treated as parts on an assembly line, moving slowly healthcare in an era of chronic disease. through an opaque quasi-system that they saw as more “provider-centric” than “patient-centred.” Providers who Patient engagement is a term that encompasses the important shared these concerns reported that many professionals role of the patient as end-user: i.e., “starting from the premise and managers are so stretched that they can do little other of expertise by experience, patient engagement involves the than meet the demands for their own expertise. Some collaboration and partnership with professionals.”111 In professionals observed that their efforts to propose even Canada, a number of health commissions have highlighted modest improvements at the institutional level were politely the importance of refocusing the healthcare system to centre heard and pointedly ignored by management. Finally, on the patient.xix For example, Recommendation 1 of patients and providers alike consistently flagged their Saskatchewan’s Patients First Review stipulated that “the challenges in navigating the system and its complex web health system make patient and family-centred care the of services across a range of sectors. In short, Canada’s foundation and principal aim of the Saskatchewan health healthcare systems sometimes look and feel as if they have system, through a broad policy framework to be adopted forgotten who they serve. system-wide. Developed in collaboration with patients, families, providers and health system leaders, this policy This chapter provides an overview of some developments framework should serve as an overarching guide for health in patient-centred care. Throughout, the Panel has been care organizations, professional groups and others to make particularly concerned to profile patient engagement at the Patient First philosophy a reality in all work places.”46 multiple levels: in self-care or as a caregiver to a loved one, in hospitals and similar institutions, in educational settings, Providers and administrators consistently acknowledge that and in co-design of healthcare systems more broadly. The patients and their perspectives and experiences should be the resulting focus is unabashedly high-touch rather than guiding factor in clinical care. However, the degree to which high-tech. The Panel respects leading thinkers who the patient is engaged in his or her care is variable. Most envisage more personalized care based on extensive self- institutions do survey their patients; most professionals use monitoring through mobile devices and detailed biological hand-outs to fill in information about a diagnosis and journey profiles. For example, Dr. Eric Topol has noted “[w]here today people surf the Web and check their email on their cell phones, tomorrow they will be checking their vital xix In October 2009, Commissioner Tony Dagnone presented the findings of the 110 Patients First Review of Saskatchewan’s healthcare system. His report For signs”. However, for countless Canadians now living Patients’ Sake, was a first in healthcare reform efforts, as its findings and with chronic diseases, this positive vision must seem far recommendations were intended to reflect patients’ experiences of the healthcare system. The report aimed “to realign the values of Saskatchewan’s removed from their daily struggles in navigating our health system so that the patient is again made the centre of attention.” (p.3) healthcare systems. While unique in its approach, its call for a healthcare system oriented around the needs of patients and their families was not. Rather, it echoed the findings of earlier healthcare commissions and inquiries: Commission on the Future of Health Care in Canada, Building on Values: The Future of Health Care in Canada: Final Report, 2002; Alberta’s Premier’s Advisory Council on Health, A Framework for Reform: Report of the Premier’s Advisory Council on Health, 2001; The Services Restructuring Commission, A Legacy Report: Looking Back, Looking Forward, March 2000; Commission d’étude sur les services de santé et les services sociaux, Emerging Solutions : Report and Recommendations, 2000.

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of care, and make time to field questions in person or online. • At the organizational level, staff can be educated to However, many patients expect a much wider agenda of approach their daily work with respect for principles involvement. Patients expressed a desire for: better access to of patient and family-centred care, while also collaborative, integrated care where their needs are respected; providing patients with a say in improving the local improved communications with providers, including two-way organization of care. information sharing that would permit them to better manage their own health; and engagement as partners in all decision- • At the system level, policymakers and leaders can making processes related to their healthcare. involve patients in designing services that go beyond institutional walls and span the continuum of care. Patient advocates also emphasized the importance of This also means engaging patient advocates – and the patient input to guide future decision-making around the broader public – in a dialogue about the types of care types of services that they and similarly afflicted individuals we need now and into the future. may need now and in the future.

Evidence indicates that where “patients and families are Tools to Enable Patients to actively engaged in their health, patient outcomes, Manage Their Own Care experience of care and economic outcomes can be substantially improved.”111 Canadian healthcare leaders and professionals are clearly taking steps to reorient the Digital health technology offers patients access to health system around patients’ priorities. However, as noted in information online through patient health portals. Patients chapter 2, the 2014 Commonwealth Fund ranking found can also monitor their health status through health apps that in comparison to ten other countries, Canada lags on or devices. Known collectively as consumer digital health a range of measures related to patient experience, including solutions, these tools encompass a range of information patient-centred care (8th out of 11 countries), timeliness technology products and serve a variety of functions:113 of care (11th out of 11), coordinated care (8th out of 11) and safe care (10th out of 11).27 • administrative tools that simplify patient interactions with the healthcare system (e.g. e-scheduling and Canada’s aging population will intensify the pressures for e-prescribing), change. More patients with chronic disease will expect to be partners in their own care. Furthermore, there will be greater • information management and communication tools impetus for providers to take a holistic approach that promotes that permit patients to be informed partners in their healthy aging,xx,112 both to respect patient’s wishes for care (e.g. patient portals or personal health recordsxxi), independence, and as a way of reducing demands on the and healthcare system. In this vein, care will need to be accessible at home (e.g., through virtual care and self-management of • virtual care, that enables the delivery of healthcare to conditions) so that more seniors can live independently for as patients outside of the or physician’s office, using long as possible. Thus, as with the move away from institution- technological applications or devices (e.g. remote centred care, the so-called “Grey Tsunami” may catalyze a shift patient monitoring). towards patient engagement that benefits all Canadians.

These changes will need to take place at different levels:111 xxi “A Personal Health Record is a complete or partial electronic health record under the custodianship of a patient or family member, that holds all or a • At the individual level, patients can be supported to portion of the relevant health information about a person over their lifetime.” Stylus Consulting. Nova Scotia Personal Health Record Demonstration Project: engage in their own care by consumer health Benefits Evaluation Report. Ottawa: Canada Health Infoway; 2014. Available technologies and better access to information, including from: https://www.infoway-inforoute.ca/en/component/edocman/1995-nova- their own health records. scotia-personal-health-record-demonstration-project-benefits-evaluation- report/view-document

A patient portal is a secure website through which patients can access their health information as well as carry out administrative tasks such as completing forms online, communicating with their providers, requesting prescription xx Defined as the “process of optimizing opportunities for physical, social and refills, reviewing lab results or scheduling medical appointments. What is a mental health to enable seniors to take an active part in society without patient portal? [Internet]. Washington: U.S Health and Social Services; Available discrimination and to enjoy independence and quality of life.” from: http://www.healthit.gov/providers-professionals/faqs/what-patient-portal

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These tools can increase patient satisfaction and autonomy, • Through Canada Health Infoway, Canada is still while allowing care at home. Other anticipated outcomes building health info-structure, even as the number include reduced emergency room visits, hospital admissions of wireless consumer digital solutions grows daily. and bed stays.114 Consumer digital solutions can also These digital health solutions, however, depend on increase provider satisfaction and improve provider interoperable electronic medical and health records productivity. For example, e-scheduling has been shown systems.113 Canada is being held back by incomplete to reduce appointment no-show rates and time spent interoperability, as well as gaps in uptake of booking appointments.115 electronic medical records in primary and ambulatory care settings.119 A number of healthcare systems have successfully adopted such tools. For example: “As a specialist in a major urban centre, I provide • Denmark has made leading in information technologies services to First Nations on reserve who are a political priority. Since 2003, patients in Denmark flown down for care. I know of three have had access to their own health information through a national public, internet-based portal called communities up North where the nursing www.sundhed.dk.116 Each citizen has a personal page stations have digital X-ray capability, with the that sets out his/her health information, and allows communication with health professionals, renewal of scans stored on a secure server. However, this prescription medicines, and viewing of waiting times secure server does not link up to any servers in for operations and quality ratings of hospitals. The the province because of concerns about federal portal also supports self-management of disease and conditions by providing patients with access to local privacy laws. This means that specialists like me disease management systems, as well as chat rooms cannot access the patients’ films. Sometimes for patients with specific disease and conditions.117 when patients comes down for care, the nursing • In 2004, France implemented a voluntary electronic station will can give them a CD, which is easily health record system called the Dossier Médical lost and can be opened by anyone. So, either I Personnel, which became electronically accessible to patients through a secure patient portal in 2011.116 don’t get the scan or nurses at the nursing Through the portal, patients are able to access their station take a photo of the X-ray and text it to electronic record; view all documents except those me. Either way, this is not good quality care.” deemed sensitive by their author; prevent certain documents from being seen by different care providers; Stakeholder Submission request the destruction of health documents, as well as add personal health information that they feel is relevant. They are also able to manage which healthcare providers have access to their personal • The confirmed in 1992 that health information and under which circumstances, patients have the right to access their personal health as well as view the activities healthcare providers information. However, misunderstandings by within their Dossier. practitioners, institutions, and jurisdictions persist on this score, and are amplified by unsupported liability In contrast, Canada’s progress in rolling out consumer concerns.120 health technologies to all patients has been slow. For example, while 80 percent of Canadians would like access • Stakeholders across Canada cited a lack of clarity to their health information online, surveys conducted by about the scope and reach of privacy legislation, Ipsos Reid in 2010 and 2013 indicate that only four percent coupled with a risk-averse culture, as impeding virtual of Canadians currently had such access.118 From what the care and access by patients to their own personal Panel heard and read, a number of structural and cultural health records. barriers are slowing progress on this front. In particular:

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• Patient access to, and co-ownership of, their own Nova Scotia are all pursuing provincial roll-outs of personal records is a significant cultural shift for providers who health records and/or portals.123 BC is providing patients have traditionally been custodians of health records. with electronic access to lab results. In Ontario, adoption This may require training and support in making the of personal health records and patient portals is being change, e.g. guidance on how to share clinical notes driven at the institutional and organizational level, e.g. by with potentially alarming but still incomplete Sunnybrook Hospital’s My Chart and McMaster University’s information.121 Currently, many patients experience Personal Health Record.xxii unreasonable delays or confiscatory charges when they seek access to and control over their own records.122 Access to virtual care services in Canada is also improving, particularly with respect to remote patient monitoring for individuals with chronic diseases and those recently “We need to educate providers and patients in discharged from hospital.124 A recent pan-Canadian study the areas of patient safety and engagement. It’s found that many regional health bodies or providers are adopting remote patient monitoring. Such monitoring is crucial that both parties come together as one regarded increasingly as the standard of care for particular unit and balance the gap between the two. patient groups.124 Last, as evidenced by the examples Patients, especially ones who have been provided in Chapter 2, virtual care is also helping to extend services to rural, remote and underserviced areas.125 harmed by the “the system” have a very unique perspective which offers valuable insight for providers. What may seem Organizational and Culture appropriate for providers may be the complete Change opposite of what patients are wanting/ At the organizational level, shifting to patient and family- centred care has serious implications. It means adopting needing.” a different way of working – one that truly integrates patients’ values, experiences and perspectives.111 This “We may not need more doctors or more requires firm leadership, engagement of staff through coaching and training, and enlisting and preparing patients testing. We may need better communication to act as advisors.126 between professionals and better Through its consultations and commissioned research, the communications with patients.” Panel learned that healthcare organizations in jurisdictions Public Submissions across the country are beginning to take these steps. For example, Kingston General Hospital in Ontario first formally adopted an institution-wide policy of patient and family engagement in 2010.111 Today, the hospital involves • Reimbursement processes have not kept up with patients and families as advisors in all major committees, technological developments. Provincial payers are hiring decisions, staff orientation, and justifiably wary that new fee codes for digital encounters education. Hospital leaders credit these efforts, along with could escalate rather than reduce costs – another staff commitment, for significant improvements in patient signpost of the need to create blended payment and health system outcomes, including improvements in systems for physicians. On the other side of the coin, indices of patient satisfaction and institutional reputation.111 the healthcare system provides little incentive for physicians to adopt these new tools, particularly when it is the patient, healthcare institutions, and the system in general that realize the benefit.113

xxii Ontario is also rolling out a comprehensive web-accessible electronic health Notwithstanding these challenges, some jurisdictions in record, based on major upgrades of a longstanding platform in Southwestern Canada are moving forward with the roll-out of consumer Ontario. The platform is nearing launch for about 6.75 million residents of the Greater Toronto Area, and will scale up from there. Patient portals will digital health technologies. Alberta, Saskatchewan, and be activated in the second phase of the effort.

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“Patients need to be seen and treated as A Systems Level Focus on individuals and not just as a body or a Patient and Family Care condition. There needs to be recognition of and sensitivity to their personal circumstances In an ideal world, healthcare delivery would be organized and life situation.” around a defined set of patient needs over the full continuum of care; and patients would be attended by Participant at Patient Roundtable interdisciplinary healthcare teams custom-designed to anticipate and meet their needs throughout any given journey of care.128 The patient perspective would also be solicited and incorporated into the design of care, from “There is considerable lip service to team the research that informs it to the technologies that help deliver it. As the Panel heard at a patient roundtable approaches, interdisciplinary and high-quality discussion, involving patients in the design of some or all care for older people but it is simply not a segments of the healthcare system changes the conversation. reality in practice.” Indeed, their very participation can be a disruptive innovation that accelerates healthcare system reform.129 Stakeholder Submission Internationally, this latter message is being heard as health professionals engage patients in what has been termed experience-based co-design.111 The US Collaborative The Université de Montréal (U de M), understandably, has Network (C3N) is internationally lauded as taken a more pedagogical focus. It is embedding patients exemplifying this disruptive approach. A prototype of the in the education and training of health professionals. The Institute of Medicine’s vision of a learning healthcare goal is to galvanize movement to a new model of care that system, C3N aims to transform care for children with sees the patient as an equally valued member of the Inflammatory Bowel Disease through a “large-scale ‘wrap healthcare team.127 To this end, patients have been strongly around’ network of care that connects patients, parents, engaged in the redesign of U de M’s Interprofessional caregivers, clinicians and researchers to partner and co- Collaborative Education curriculum – a core component design improvements”.111 Working with multiple industry for some 1500 students in health sciences and psychosocial partners, C3N has created patient and parent workgroups, science programs. Patients are also trained and paired with apps and technologies, and developed a community across educators to become co-trainers in Interprofessional 73 sites involving 450 gastroenterologists and one third of Collaborative Education workshops that all students attend. all paediatric patients with inflammatory bowel disease in This helps students understand the patient’s perspective the US. This network is expanding into the UK and a new and experiences, as well as the value of partnering C3N is in the works for patients with cystic fibrosis. meaningfully with patients in clinical practice. Participating clinics have seen remissions for their patients increase from 55 percent to 77 percent over a five-year These and other pockets of success demonstrate the period, along with increases in patient satisfaction and potential for shifting organizational culture and provider overall happiness. attitudes and practices. However, as noted, many Canadians expressed concern to panelists about the disjointed design of healthcare delivery at the systems level – a topic to which this chapter now turns.

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Bridgepoint Active Healthcare specializes in McGill University and the Fondation de l’hôpital de caring for patients with complex chronic health Montréal, as well as a $22 million investment by the 131 conditions. Through a ‘living laboratory’ Government of Quebec. The goal is to serve 20,000 vulnerable children in Quebec by 2020. The approach, clinicians and researchers at organization representing Quebec’s nurses has Bridgepoint connect directly with patients and announced that it will be providing a $250,000 grant to support clinical nurse training in these centres.132 their families to better understand their experiences of care. This close link with patients • First launched in 2012, Community Health Links is provides researchers with the opportunity to a program run by the Ontario Ministry of Health and Long-Term Care that supports the coordination of model, test and evaluate new approaches on a care for high needs patients such as seniors and rapid basis, with a view to optimizing clinical people with multiple conditions.133 Healthcare organizations that are part of Health Links must work services, making system-level improvements, with other sectors in the healthcare system to develop and using design principles to improve health and oversee coordinated care plans for complex outcomes for individuals who often must patients. Patients are assigned a designated provider that they know and can contact regularly. transition between home and both general and Collaboration by members of Health Links across rehabilitation hospital settings. To ensure better health sectors is enabled by digital technology, which institutional integration on that latter score, also allows them to track and measure their results. Bridgepoint has recently merged with Mount Several promising initiatives that empower seniors were Sinai Hospital to form the Sinai Health System. highlighted during the Panel’s consultations. As one example, Teams Advancing Patient Experience – better known as TAPESTRY – is a program in Hamilton, Ontario Source: About us. Toronto: Bridgepoint Active Healthcare; c2014. Available from: http://www.bridgepointhealth.ca/en/who-we-are/about-us.asp that enlists and trains volunteers to help older adults identify and meet their health goals, as well as manage their own care. The volunteers, in turn, are engaged with In Canada, too, there are pockets of innovation where an inter-professional healthcare team.134 services for specific populations are being re-designed around the needs and experiences of patients. While Whereas these innovations are localized, wider-angle different in ambition from the C3N model, they embody engagement of patients in overall system design is also a similar commitment to thinking beyond a single clinic, underway. Alberta’s Patient and Family Advisory Group institution, or service. For example: partners with leaders across the health department to review policies and initiatives and share insights from the • Community social pediatrics is an integrated approach patient and family perspective for the planning and to care that focuses on underserved or vulnerable delivery of quality healthcare services.135 The BC Patients children and youth.130 Founded in Canada by Dr. as Partners initiative is a formal partnership among the Gilles Julien in the 1990s, this approach integrates Ministry of Health, healthcare providers, universities, care for patients and families across both the health healthcare not-for-profits and non-governmental and social services sectors. Healthcare providers organizations.136 All these provincial organizations work deliver pediatric services and work with families and together to include the patient voice, choice, and other community-based professionals including representation in healthcare improvement. educators, social workers, legal aid, and law enforcement, to provide children with the support The credo driving the BC Patients as Partners initiative is they need to flourish. Currently, there are 16 clinics “nothing about me without me.”136 That motto might be in Quebec, serving approximately 4,000 children and adopted more generally by patients and families in dealing their families. Community social pediatrics is on track with healthcare across Canada. Nowhere is it more to being spread more widely in Quebec through applicable than in the case of Canada’s Aboriginal peoples. partnerships among the Université de Montréal,

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Patient and community engagement are exemplified in -- a comprehensive online resource that provides the All Nations’ Healing Hospital in Fort Qu’Appelle, information on advanced illness, end-of-life care, and Saskatchewan, one of the first healthcare facilities in grieving to a wide audience.140 The website features multi- Canada owned and operated by First Nations’ governments. media content, and also connects the public directly online The All Nations’ Healing Hospital provides culturally to an inter-professional team of health experts who respond relevant healthcare in a team environment,137 including confidentially to questions. While it operates out of maternal-child services and a wide range of counselling, Winnipeg with support from the Government of Manitoba, mental health, and addictions services. All these programs it serves more than 21,000 unique visitors per day with carefully integrate the best of mainstream therapeutic Ontario, BC, Alberta and Quebec driving three-quarters techniques with traditional First Nations healing practices. of the traffic.

The Panel learned about many other examples of facilities and programs run by First Nations, and was encouraged “Much of healthcare focuses on curing the by the growing movement across Canada to offer culturally incurable. I wonder about the cost and appropriate, patient-centred care for Aboriginal peoples. suffering caused by attempts to preserve life In this regard, the Panel urges all governments to accelerate such efforts in partnership with Canada’s Aboriginal when quality will be limited. Now that is peoples, and returns to this topic in Chapter 6. loaded, because I also realize that quality exists in many different packages and it is not The Societal Dimension my decision to determine this for others… Perhaps more conversations about As noted in Chapter 4, the Canadian healthcare system is facing a period of accelerating change with population ‘expectations’ and ethics could make some of aging, demands for consumer autonomy, the rapid the muddy waters clearer.” emergence of precision medicine, and an explosion of genetic information about individuals and populations. Public Submission These issues give rise to a range of social and ethical issues and have created new imperatives for sharing information and respecting the views of patients, families, and, more broadly the Canadian public. The success of the Canadian Virtual speaks to the broader issue of making objective and credible information End-of-life care exemplifies some of these challenges. The on healthcare more accessible to all Canadians. Health Supreme Court of Canada decision in Carter v. Canada138 literacy should be actively promoted through expanded has been widely interpreted as decriminalizing physician use of digital resources and apps that provide patients and assistance in dying. In responding, governments will need the public with customized, interactive sources of to balance the needs of the patients with protection of the information and advice on health and healthcare services. vulnerable. As seems to be the rule in Canada, there are For example, England’s National Health Services Choices also jurisdictional complexities. Regulation of medical (www.nhs.uk) is a reliable, comprehensive source of health services falls within the constitutional jurisdiction of and social care information for the public. It aims to support provinces and territories. Absent federal revisions to the the public in making choices about their health, from Criminal Code,139 some provinces and territories will move lifestyle choices to accessing NHS services in England.141 ahead with regulations while others take a “wait and see” It includes more than 20,000 regularly updated articles approach – a situation that puts terminally ill Canadians and more than 50 directories that allow people to find, on an uneven playing field. choose and compare health services available in England. Rather than reinventing the wheel, the Healthcare As governments grapple with the Supreme Court of Canada Innovation Agency of Canada could play a useful role decision, there is widespread acknowledgment that we simply by aggregating links to the most reputable and need to strengthen resources and services relevant sites, thereby making it easier for Canadians to for Canadians. A novel approach has been taken by the access health-related information. Canadian Virtual Hospice (http://www.virtualhospice.ca)

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“I am part of the Canadian Virtual Hospice Recommendations to the team that has created an amazing free resource Federal Government for people and their families who are coping with a life limiting illness like cancer.” 5 1. Through the new Healthcare Innovation Agency of Canada, “Much could be saved by funding national with federal investments from the entities that provide information to patients Healthcare Innovation Fund, pursue and families. For example, each LHIN in the following priorities: Ontario is developing its own palliative care website. Duplication is a problem.” • Develop and implement a strategy to promote patient and family-centred care in partnership with Public submissions governments, patients, providers and others. Elements of this strategy would include:

As well, information about the healthcare system and its οο Developing and implementing information tools performance in Canada is difficult to access for patients that patients need; and the public. The Canadian Institute for Health Information (CIHI) does offer extensive information about οο Creating incentives for greater patient engagement comparative health system performance on its website, at the organizational and system level, with the but the tools seem to be designed more for researchers, goal of improving models of care and system managers, and providers than for a wider audience. The design; Panel returns to this issue in Chapter 7. οο Sourcing and supporting mobile and digital health In conclusion, the Panel has learned about many pockets solutions that meet needed common standards and of successful innovation to promote patient-centred care interoperability requirements; and and patient and family engagement in healthcare and health professional education across Canada. Panel οο Adopting and deploying best practices in the members commend the commitment and dedication of development and use of patient portals, including many individuals within the system who have advanced best practices internationally. the patient engagement agenda. At this point, a more concerted and collaborative effort is needed to: spread and • Support the development of policy and legislative tools scale up these initial efforts; support and evaluate new to enable patient access to, and co-ownership of, their initiatives for wider adoption; improve awareness of the own personal health records. relevant concepts; address structural barriers to innovation in patient-centred care; help Canadian governments to • As discussed in Chapter 6, support provinces, stay aligned in responding to the ethical, legal and social territories, and regional health authorities in issues emerging in healthcare; and promote wider health undertaking large-scale projects that implement highly literacy in an era of rapid innovation. integrated delivery systems that test new forms of payment, where care is organized and financed around The following recommendations respond to these the needs of the patient. identified needs.

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5 .2 Through Health Canada, take the lead in consultation and consensus building across provinces and territories on emerging ethical and legal issues arising from technological and social innovation in healthcare, and bring forward needed legislative changes in a timely fashion .

5 .3 Through Health Canada, request the federal Privacy Commissioner to work with provincial and territorial privacy commissioners to develop a common understanding on how to protect privacy while enabling innovation (e g. . in precision medicine and genomics, mHealth, and various forms of digitized health records) across Canada .

• Privacy commissioners should be asked to consider how their respective legislative frameworks could be better harmonized across Canada to reduce any unnecessary duplication or confusion that could impede innovation.

56 | CHAPTER 5 — PATIENT PARTNERSHIP, PUBLIC EMPOWERMENT Chapter 6 Integration and Innovation: The Virtuous Cycle of Seamless Care

“Canada does not have an integrated system. Canada has a series of disconnected parts, a hodge-podge patchwork, comprising hospitals, doctors’ offices, group practices, community agencies, private sector organizations, public health departments and so on…. of problems is long: uncoordinated care, underuse of non-medical practitioners, provider payment methods with perverse financial incentives, emphasis on disease treatment, unexplained variations in service utilization, geographical maldistribution of practitioners, little use of information and information technology, waits and other access problems, retarded dissemination of proven technology, little emphasis on consumer satisfaction, sparse evaluations of quality of care and outcomes, shortages of various health professionals, rigid role definitions that do not allow new models of care, and looming significant cost increases.”142

Peggy Leatt, George Pink and Michael Guerriere UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Integration and Innovation: The Virtuous Cycle of Seamless Care

Made-in-Canada models for integrated delivery systems What is an Integrated Model of were proposed almost twenty years ago.143 At the time, Care? the vision was that these systems might compete for patients in larger urban centres. Dr. Leatt and colleagues Based on successful international models, the critical elements published their lament about lack of progress (quoted of a highly integrated system can be defined as follows: Inter- above) five years later. Another 15 years have passed, and professional teams of providers collaborate to “provide a most of the same criticisms still apply to Canada’s coordinated continuum of services” to individual patients, healthcare systems. supported by information technologies that link providers and settings.144 Operating revenues are derived by pooling funds Now, as then, there is no logic to the existing payment and across the involved sectors of the healthcare system. Whether accountability silos in our healthcare systems. Healthcare in a single entity or organized in a network configuration, the remains disjointed, with poor coordination and alignment providers must be “willing to be held clinically and fiscally within and across the various professions, acute and chronic accountable for the outcomes and the health status of the care institutions and community care. Lack of integration population being served.”145 is partly understandable where there is a multitude of payers (e.g., public insurance, private insurance, out-of- The degree to which different systems have integrated pocket spending). That services that are solely publicly healthcare services varies, from comprehensive integration of funded are still arranged in stovepipes has been harder services in the US Health Maintenance Organization (HMO) for the Panel to comprehend. model (e.g. Group Health or Kaiser Permanente) to more focused integration strategies (e.g. regional commissioning in During Panel consultations, stakeholders repeatedly cited the UK National Health Service and some payment models this fragmented financing as a barrier to the uptake of being rolled out under US Patient Protection and Affordable Care innovation, a frustration to entrepreneurs and industry, Act reforms). and an impediment to high-quality and cost-effective care. Moreover, as one might infer from Chapter 5, so Evidence dating back forty years suggests that integration long as the system is organized around providers and so has benefits in terms of the patient experience and cost long as those providers are paid out of separate funding containment. Starting in the early 1970s, the landmark envelopes, patient-centred care will be easy to announce RAND Health Insurance Experimentxxiii compared patients and difficult to achieve. enrolled in an integrated healthcare plan or HMO where professional staff were salaried, with those who received This chapter first defines integrated models of care, and first-dollar coverage of care obtained from private fee-for- then reviews some of the relevant evidence and experience service physicians making referrals to independent from the US from whence many of the key insights about hospitals. The results? Those receiving care in the integration models and methods have come. The chapter integrated model had lower rates of hospitalization and then briefly takes stock in Canada, before turning to the received more preventive services. As a consequence of two strategic elements in achieving more integrated care lower hospitalization, the cost per person was much lower. for Canadians: alignment of payment systems and Those in the fee-for-service group fared slightly better on incentives, and development of new health human resource process and satisfaction measures because the patients in models. The Panel concludes the chapter with a discussion the integrated model were not guaranteed consistent access focused on First Nations, who currently navigate the least- to their own physician of choice. integrated of any healthcare system in Canada.

xxiii This randomized trial was primarily concerned to determine how different levels of co-payments (i.e. user fees at the point of service) affected use of medical care. Compared to patients with full coverage (or ‘free care,’ analogous to Canadian Medicare), those making co-payments definitively reduced their visits to physicians. Controversy has continued for decades as to the potential impact of those reductions on patients’ long-term health outcomes.

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Figure 6.1: Annual Rates of Service Utilization and Healthcare Costs

Group Health Fee-for-Service Cooperative No Cost-Sharing 25% Cost-Sharing Percent Using Service 87 85 76 Percent Hospitalized 7 11 9 Hospital Days/100 persons 49 83 87 Physician visits 4 .3 4 .2 3 .5 Preventive visits 0 .6 0 .4 0 .3 Annual costs/person $439 $609 $620

Source: Adapted from: Wagner EH, Bledsoe T. The Rand Health Insurance Experiment and HMOs. Med Care. 1990 Mar; 28(3):191-200.

The RAND study involved Group Health, a well-known of the healthcare system, efficient management of hospital HMO that continues to operate successfully on a larger use, greater investment in information technology, and the scale today. A similar organization, Kaiser Permanente, motivation for continuous improvement provided by has been more closely studied and offers newer insights competition.149 into the benefits of integrated delivery systems. As noted above, Kaiser engages physicians and other health professionals in the co-management of the system. Kaiser Permanente While professionals are salaried, they receive bonuses for quality of care and effective stewardship of shared Kaiser Permanente serves approximately 10 million resources. Professionals also spend more time using their members throughout the southwest US.146 It offers a very unique expertise and innovating at “the clinical coal-face,” wide range of services, both directly and through contracts because clinical responsibilities are allocated to the most and networks. For example, Kaiser operates its own appropriate personnel. As the 2002 study noted, the and is the largest non-governmental purchaser integrated management and budgeting allows Kaiser “to of pharmaceuticals in the world. manage patients in the most appropriate setting, implement disease management programmes for chronic conditions, In a comparison with the National Health Service (NHS) and make trade-offs in expenditures based on in 2002, Kaiser was found to perform better at roughly the appropriateness and cost effectiveness rather than artificial same cost per capita. As well, its members “experienced budget categories.”150 more comprehensive and convenient primary care services and much more rapid access to specialist services and hospital admissions. Age adjusted rates of use of acute “At Kaiser Permanente, there are many hospital services in Kaiser were one third of those in the thousands of staff who have a major portion NHS.”147 The study’s authors concluded that “widely held (15%) of their variable compensation tied to beliefs that the NHS is efficient and that poor performance in certain areas is largely explained by underinvestment innovation contributions.” are not supported by this analysis.”148 Stakeholder Submission What are the critical elements to Kaiser’s success? The authors of the 2002 study attributed much of Kaiser’s success to real integration through partnerships between In 2005, Kaiser created a comprehensive personal health physicians and the administration. Related factors were record called MyChart, which patients can access through system control and accountability across all components a secure patient portal called My Health Manager.151 Fully

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integrated with existing information technologies, the The first is the funding of Accountable Care Organizations. portal permits secure messaging between patients and These are voluntary networks of providers that take providers, e-scheduling and e-renewal of prescriptions. responsibility for the costs and quality of a defined set Since the implementation of the system, the number of of services for a given number of US Medicare recipients digital encounters has risen from five percent to 67 (persons 65 and over).153 There is no predetermined percent, with 50 percent of all interactions between Kaiser mode of physician payment. The goal of Accountable patients and physicians occurring via secure messaging. Care Organizations is to drive down costs while 146 Overall, the number of physical visits (i.e., clinic visits, maintaining quality. emergency department visits and hospital admissions) has dropped significantly. The second strategy is bundling of payments. Bundled payments were defined by Jason Sutherland in a Panel Last, Kaiser’s rich databanks are used to support quality research report as “single payments issued for a patient’s improvement efforts, evaluate innovations in the delivery entire episode of care for a health condition or procedure, of care, find new efficiency opportunities, and facilitate potentially spanning multiple healthcare providers and academic health services research.146 They also help identify settings”.154 This is some distance, obviously, from the patients at risk. In that regard, while Kaiser’s low rates of fully integrated and comprehensive care provided in US hospitalization are largely a result of excellent primary group health plans such as Kaiser Permanente. However, care, effective deployment of multi-professional teams, as Sutherland notes, bundled payments offer “built-in and heavy use of virtual care, there is a strong emphasis financial incentives for coordination and integration of on population health management and preventive care, care between providers” and “more cost certainty across including outreach to vulnerable subpopulations. the continuum of care than traditional a la carte payments to multiple providers.”154 Indeed, by putting a single price Kaiser’s strength demonstrates the importance of learning on an entire episode of care, bundled payments offer “the from successes in any system. While the US is still equivalent of a ‘care warranty,’ where the financial struggling to contain healthcare costs, improve value, and consequences of any complications that occur within a deliver more equitable access, it is also a hotbed of defined period of time (such as unplanned readmissions)­ healthcare innovation. Moreover, as discussed below, more are the providers’ responsibility.”154 systematic reforms are being attempted in American healthcare with the specific objective of enhanced Sutherland notes that these payment changes have driven integration of payments and services. vertical integra­tion of services and catalyzed a rapid increase in the number of US healthcare mergers.155 On the other hand, as the US Society of General Internal Medicine’s Accelerating Integration in US National Commission on Physician Payment Reform observed Healthcare Services in 2013, neither of these models requires a shift from fee- for-service remuneration of individual doctors. Their primary The Patient Protection and Affordable Care Act of 2010152 recommendation follows: “Over time, payers should largely (also known as the Affordable Care Act and widely called eliminate stand-alone fee-for-service payment to medical Obamacare) has garnered international headlines for its practices because of its inherent inefficiencies and problematic insurance reforms, particularly the extension of coverage financial incentives.”156 Other recommendations urge rapid to millions of uninsured Americans. Less well known are experimentation with new models of payment designed to the integrative payment modalities that have been enabled reward quality and value, with a view to “broad adoption” by Obamacare, as briefly introduced in Chapter 2. Panel of the best models within a decade.157 members reviewed key publications, commissioned research on payment modalities, and visited the Washington The Center for Medicare and Medicaid Innovation (CMMI) area to hear first-hand from policy experts as well as those in the US has taken this advice seriously. Bundled and involved in designing, driving, and evaluating these new blended payment models that start to move physicians remuneration and delivery mechanisms. away from simple fee-for-service remuneration are now being rolled out.158 These and other innovations in payment Two strategies that the Affordable Care Act has introduced and organization of healthcare are being implemented for bear brief notice here. seniors through the federally-administered Medicare program, and for low-income Americans through

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conditional cost-sharing and collaboration with state family physicians unfortunately was and remains small. governments. Quebec later underwrote a more traditional model – the Groups, launched in 2002. Both the CMMI and its sister organization, the Agency for Healthcare Research and Quality, are strongly committed to transparency. Data are shared widely with researchers, “We need to shift from an emphasis on acute and CMMI staff actively study and refine all new models hospital care to community-based care based on of care. As a result, a cycle of evaluation and iterative inter-professional teams of healthcare providers improvement to the Affordable Care Act reforms is unfolding publicly through an ever-growing number of articles in working with other community social services in leading US medical journals. collaboration with specialists and hospitals - and

Today, while the US faces huge healthcare challenges, it also with municipalities, school boards, police and has also become a dynamic laboratory for healthcare the business community to address the innovation and integration. Scaling-up remains a underlying causes of illness.” challenge, as noted in Chapter 2. However, as Pierre- Gerlier Forest from Johns Hopkins University has rightly Public Submission stated, “We would be fools not to try to learn from this colossal experiment.”159

“We don’t have a system. We have a collection Limited Integration of Healthcare of services and programs.” Services in Canada Participant at Regional Consultation Chapter 3 highlighted how frequently concerns about limited integration have surfaced in major healthcare reports. While many countries share the problem, Canadian healthcare appears to be particularly fragmented­ – and Ontario’s Community Health Centres were also set up in peculiarly resistant to reform in this regard. the 1970s with salaried staff. They offer multi-professional primary care with an emphasis on health promotion and The regionalization of healthcare that took place in most a strong community development orientation.161 Canadian provinces during the 1990s is sometimes Policymakers considered scaling up this model because of presented as a positive example of integration.160 While its preventive possibilities. However, as occurred with governance was indeed notionally integrated, the impact CLSCs in Quebec, most family physicians elected instead was limited, in part because regional health authorities to establish their own practices. have generally lacked any authority over budgets for physician services and drugs, and in some instances, home In the late 1990s, as noted in Chapter 3, Ontario began a care services as well. wider initiative in primary care reform that has continued in waves ever since. New models of capitation funding Another widespread strategy has been to approach have increased the number of primary care practitioners integration from the front-lines through primary care working in a range of new physician-led group practice reform. For simplicity, initiatives in Canada’s two largest models. 69 Over the years, these reform efforts have cost provinces can serve as cases in point. hundreds of millions of dollars in new spending.69 Models vary in the amount of supplemental funding provided to Quebec’s Centres locaux de services communautaires broaden primary care teams. In an interesting nod to its (CLSC), for example, number over 140, date back to the own history, Ontario in 2007 created a set of Nurse early 1970s, and provide a focal point that integrates Practitioner-led Clinics for patients who have trouble multidisciplinary primary care and social services.161 This finding a family physician. About 25 of these clinics visionary initiative had the potential to link primary care currently provide multi-professional team care to these with efforts to address the wider determinants of health. vulnerable patients. Nurse practitioners also help these However, the proportion of CLSCs that have recruited patients navigate the healthcare system.162

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Five tangible outcomes of primary care reform have been may well be ‘the fatal flaw’ in Canadian healthcare.167,158 a shift to capitation as the basis for remuneration of a One partial exception is the Integrated Comprehensive substantial proportion of Ontario’s family physicians, a Care program at St. Joseph’s Healthcare in Hamilton, sharp increase in the annual earnings of family physicians, Ontario. This initiative is unusual in that it uses a “bundled a related rise in applications to family medicine residencies, payment” approach for certain clinical streams, e.g. growth in the employment of other health professionals patients undergoing thoracic surgery or total joint in primary care settings, and, as noted in Chapter 3, replacement (hip and knee), as well as those hospitalized encouraging but very modest improvements in a moderate with conditions such as chronic obstructive pulmonary number of performance measures.69 disease and congestive heart failure. Evaluation of the program has already shown improved continuity of care, In sum, attempts to fully integrate primary care with social evidenced by reduced readmission rates for target services have not met with great success. The full potential procedures, higher patient satisfaction, and positive of multi-professional team care has not been consistently perceptions on the part of patients and providers alike.168 realized in reform initiatives. And, perhaps most importantly, Ontario seems poised to scale this program up across the integration of primary care with specialty care or with the province – an important step forward. institutional sector has been limited in most models. At present, then, Canada still lags the US in tackling the Turning to patients with particular characteristics or hardest silo of all: the small business model of medical conditions, Chapter 5 highlighted some pioneering efforts practice with its fee-for-service compensation system. The to make care more effective and patient-centred through Panel encountered a range of opinion about what integration. A similar motivation is evident in Alberta’s compensation methods would fairly reward doctors for Strategic Clinical Networks (SCN), introduced briefly in the vitally important work they do. The rationale for a Chapter 3. To elaborate, these are province-wide teams change, heard repeatedly in the Panel’s consultations, is comprised of healthcare professionals, researchers, that physicians should be rewarded for clinical excellence community leaders, patients and policymakers. The teams and for generating value. Such goals are neither compatible are organized around a specific clinical focus with a view with a simple salary model, nor with an unadulterated to enhancing the patient journey, improving health fee-for-service system that rewards volume and little else. outcomes, and standardizing care delivery.163 Ten SCNs are currently in place covering major clinical conditions, Even capitation payment in “reformed” primary care has with six more slated for implementation over the next two only weak alignment with system-wide value generation. years.164 SCNs are expected to align their work with There is, however, very little imagination needed to come provincial priorities, develop a research and innovation up with other modes of bundled payment that might program with academic partners, and attempt to identify engage primary care physicians and align incentives and and eliminate harmful, outdated, ineffective and/or outcomes in the interests of patients and taxpayers alike. inappropriate elements of care. The Panel was particularly For example, a number of studies have identified Ambulatory encouraged to learn that each team is committed to the Care Sensitive Conditions – those where excellent primary scaling-up of improved practices.165,166 care and, if needed, ambulatory specialist care, can reduce the rate of urgent hospitalization. Realigning Incentives and Panel members accordingly asked: Why not create bundled Physician Payment Systems payments for primary care groups that offer incentives – and yes, some financial penalties – based on the number All these reform initiatives are praiseworthy. None, of patients at risk who are kept well enough to avoid however, comes close to matching the type of alignment hospital care? Why not devise, test, and as appropriate of incentives that occurs in the new payment programs scale up other modalities, whereby other physicians can being launched in the US Medicare and Medicaid programs be compensated on a blended basis – partially through – let alone the comprehensive level of integration seen in the fee schedule, and partially through bundled payments? large group health plans south of the border. This continued weak integration of budgets and accountability

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Reimagining the Healthcare “emerging consensus that optimizing scopes of practice Workforce paired with supporting evolving models of shared care can provide a multidimensional approach to shift the healthcare As discussed in Chapter 5, healthcare delivery in Canada system from one that is characteristically siloed to one that needs to move from a provider-focused system to one that is collaborative and patient-focused.”169 The report assesses is based upon the needs of patients. This will involve where Canada is right now, where it should aim to be and organizing delivery over the full care cycle, with patients how to get there (see figure 6.2). grouped based upon their healthcare needs and provider teams established to meet those needs.128 Those teams In its recommendations, the Canadian Academy of Health can be enabled by a combination of changes in payment Sciences calls for “an integrative structural framework models and by optimizing the scopes of practice of health that supports the optimization of healthcare professional professionals – a topic to which the Panel turns now. scopes of practice and innovative models of care.”169 This framework would recognize shared responsibility at the In 2014, the Canadian Academy of Health Sciences released practice and institution levels with a regulatory model its ground-breaking report on health human resources in and a proposed accreditation structure. Canada.169 This wide-ranging review focused on the most effective scopes of practice to support integrated models The Panel strongly endorses the findings and of care in Canada. In the words of the report, there is an recommendations of the Canadian Academy of Health

Figure 6.2: Scopes of Practice Supporting Innovative Models of Care

WHERE WE ARE HOW WE CAN GET THERE WHERE WE WANT TO BE Current Canadian Health Care A transformed health care system System characterized by characterized by: insufficiencies around: Evaluation & Performance • A move from supply to need focused • Accessibility - particularly for Measurement (needs determine models to scope) marginalized and disadvan- • A move from professional taged populations to patient focused • Care provided outside of • A move from isolated, siloed business hours professionals to teams based on • Wait times non-conventional and conventional Enablers and strategies providers • Health promotion including for circumventing patient involvement and • A move away from historic long term self-management barriers towards credential SoP to a model of team innovative models of • Appropriate use of healthcare defined tasks to meet population providers and resources care optimizing scopes needs; team allocates resources and responsibilities (task certification • Chronic care management of practice process to ensure competency) • Mental health care • Individual regulation to • Elderly and end-of-life care combined/team accreditation • Fiscal effectiveness and • Performance monitoring and sustainability evaluation that is aligned with these principles • Funding groups rather than individuals (not necessarily health outcomes - process outcomes, reduction to ER)

MACRO INPUTS - Structure Level MESO INPUTS - Institution Level MICRO INPUTS - Practice Level Education & Training Context • Governance • Team composition • Education needs/requirements • Labour/CQI Processes • Team vision • Assessment/standards/competencies • Unionization • Degree of hierarchy Economic Context • Technology form & content • Professional cultures • Funding • Provider supply & retention • Communication • Financing • Geography • Infrastructure • Remuneration Legal & Regulatory Context • Legislation/Form of regulation • Registration requirements • Provider accountability

Source: Adapted from: Nelson S. et al. Optimizing Scopes of Practice: New Models for a New Health Care System. Ottawa: Canadian Academy of Health Sciences; 2014. Available here: http://www.cahs-acss.ca/wp-content/uploads/2014/08/Optimizing-Scopes-of-Practice_REPORT-English.pdf, p.10

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Sciences and urges governments and providers to would make a rapid difference to Canadians is the implement them in a timely fashion. In addition, the introduction of shared financial incentives for hospitals, Healthcare Innovation Agency of Canada and the physicians and community providers.158 More generally, Healthcare Innovation Fund should play a supportive role even without adopting the staffing model of large-scale in accelerating progress on this front, e.g. by supporting US health plans, a range of approaches can be imagined the development of a pan-Canadian mechanism to assess that would create strong financial incentives for providers the value of healthcare services in terms of cost, provider to coordinate their efforts, to assign responsibilities in a role, and patient outcomes. This would help decision- team to the most cost-effective professional, and to be makers determine fair and cost-effective payment strategies rewarded for the quality and value of the services provided. for different providers and enable the setting of prices that reflect value in terms of patient outcomes. “Implementation and operation of an integrated health system requires leadership “The various elements of the current system with vision as a well as an organizational were largely created to respond to acute, culture that is congruent with the vision. episodic care provided in hospitals and most Clashing cultures…is one of the reasons often by individual physicians. Over the named for failed integration efforts” decades, these elements have become enshrined in legislative, regulatory, and Suter E, Oelke ND, Adair CE. Healthcare Q. 2009 Oct; 3(spec no): 16-23. http:// financial schemes that challenge adaptation to www.ncbi.nlm.nih.gov/pmc/articles/PMC3004930/ shifts in population health care needs. Health care organizations and personnel seeking “Nurse practitioners and doctors should work innovative solutions must often work around together to provide care to our patients. It’s not these barriers in order to optimize resources a competition. There is a place for them to and improve quality of care.” work collaboratively.”

Nelson S. et al. Optimizing Scopes of Practice: New Models for a New Health Care System. Public Submission Ottawa: Canadian Academy of Health Sciences; 2014. Available here: http://www.cahs- acss.ca/wp-content/uploads/2014/08/Optimizing-Scopes-of-Practice_REPORT-English. pdf, p.10 As noted, more integrated delivery systems, such as Given the need for greater collaboration between provider Accountable Care Organizations or the Kaiser model, go groups, many health organizations have called for inter- one step further and include risk sharing. System managers professional education and training in collaborative organize care across different institutions and different practice for health professions.170 The good news is that types of professional services with a view to optimizing Canada has long been a leader in inter-professional safety, effectiveness and efficiency. Compensation for education. The bad news is that the regulatory and professionals is aligned with the objectives of the entire payment environment is still a barrier to shared care. This enterprise. Perhaps the single biggest barrier to these must change. large-scale innovations is the unease of practising physicians – and their concerns should not be taken lightly.

Integrated Incentives and The Panel returns here to a theme in the preceding section. Shared Care No matter the approach, better integrating services through alignment of incentives will entail changes in physician payment As argued above, the current segmented funding envelopes and accountability structures. There is no doubt that a great and budgetary silos create many perverse incentives in the many physicians are willing and more than able to take on a deployment of health human resources. Among the much larger leadership role in changing the healthcare system bundled payment concepts that some have suggested for the better. Their engagement is essential to the future of

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Medicare. However, in the Panel’s respectful view, physicians children.”171 However, in the Panel’s consultations, it heard cannot readily join other health professionals in leading the first hand that all First Nations, including children, continue system while standing guard in front of their traditional to experience barriers in care, in part because of jurisdictional budgetary silos and related modes of remuneration. ambiguity and disagreements between provinces and territories and the federal government as to who should pay for what services. The Assembly of First Nations has Integrated Healthcare for been working with the federal government and other Vulnerable Populations: The partners to address this critical issue. Case of First Nations “I had a First Nations patient from up North who needed drainage of cancer-related fluid around the Nowhere are the impacts of a fragmented and disjointed healthcare system more keenly felt than with many of lungs. The patient was required to fly down weekly Canada’s First Nations. The Panel had the opportunity to to my urban hospital to have the fluid drained meet and learn from First Nations stakeholders in its consultation activities across Canada. It also had the despite the fact that this could be done at home opportunity to meet with the First Nations Health with a catheter and the use of sealed bottles. I was Technicians Network of the Assembly of First Nations, and told this was because there was no funding to pay with a senior representative from the First Nations and Inuit Health Branch of Health Canada. for the bottles, but that in a different budget envelope there was funding for his medical Many Canadians are aware of the relatively poorer health transport. This meant that in his last six weeks of status of First Nations and Inuit peoples.xxiv What is less well known is that First Nations living both on and off life, he had to be flown down once a week for care, reserve must traverse a patchwork of health systems rather than being looked after at home. On top of that includes multiple federal departments (Health Canada, Aboriginal Affairs and Northern Development the impact that this had on his quality of care, the Canada), provincial/territorial governments, and system should consider the cost. One of his six sometimes inter-provincial/territorial health authorities. return trips alone would have more than paid for all The result is that the endemic lack of coordination in Canada’s healthcare systems is exacerbated by of the bottles needed for caring for him at home.” jurisdictional ambiguity and inconsistencies. Participant at Regional Consultation One notable example of this phenomenon involved Jordan River Anderson, a five-year-old boy born with a rare muscular disorder requiring constant treatment. After two This situation highlights the imperative of designing and years in hospital, doctors felt Jordan could be treated at implementing integrated healthcare systems that respond home. However, Jordan stayed in hospital for an additional to the unique needs and priorities identified by First two years, as the federal and provincial governments fought Nations themselves and the related need for resolution over whose responsibility it was to pay for his home care. through tripartite discussion. Jordan died in hospital in 2005. In 2007, the House of Commons unanimously supported a Private Member’s One such model was created for BC in 2013. The BC First motion that “the government should immediately adopt Nations Health Authority reflects a shared governance a child first principle, based on Jordan’s Principle, to resolve model that has integrated a broad range of services. This jurisdictional disputes involving the care of First Nations innovative initiative is now being evaluated on multiple levels to determine its strengths and weaknesses, but holds considerable promise. xxiv On average, First Nations live about eight fewer years than the general Canadian population; First Nations infant mortality rate is declining but remains approximately 2 times higher. Compared with the overall tuberculosis incidence rate for Canada in 2012, the rate was 4.9 times higher among First Nations on reserve. Health Canada. First Nations and Inuit Health Fact Sheet. Ottawa: Health Canada; 2014 September.

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The Alaska Native Tribal Health Consortium technology systems that could improve First Nations and (ANTHC) is a non-profit organization which Inuit healthcare.xxv However, barriers still exist that impede manages statewide health services for further implementation, including: approximately 140,000 Alaska Natives and • lack of available funding for eHealth capacity, American Indians of Alaska. The ANTHC is implementation, and sustainability

managed and operated by the Alaska Native • inadequate infrastructure to support eHealth projects, tribal governments and the regional health including basic broadband access organizations. ANTHC delivers both upstream • First Nations’ own fragmented healthcare governance and downstream care; leads construction of structures water, sanitation and health facilities around • weak communication about eHealth project planning Alaska; offers community health and research among the First Nations and Inuit Health Branch, services; is at the forefront of innovative provinces and territories, and representatives of First information technology; and, offers Nations and Inuit172

professional recruiting to partners across the On another front, however, responsibilities are clear. state. ANTHC operates under a US $0.5 billion Health Canada’s Non-insured Health Benefits (NIHB) operating budget and employs approximately program for registered members of First Nations and eligible Inuit covers various services that are not covered 2,000 people. by provincial and territorial plans, such as drugs, dental and vision care, and medical travel. Total program spending in 2013-14 was over $1 billion, including $352 Source: About ANTHC. Anchorage: Alaska Native Tribal Consortium; c2005-2015. million for medical transportation.173 While NIHB Available from: http://www.anthc.org/abt/ provides a critical support for First Nations and Inuit, during its consultations, the Panel heard a wide variety Transfer of some services to First Nations is also occurring of complaints about the program.174 at the local community level in both Yukon and the Northwest Territories. However, without adequate scale- up, these arrangements are likely to remain limited in “Under the NIHB program with regard to scope and may be inefficient. , we have a predetermination system which is centralized and which takes weeks to More generally, First Nations leaders expressed concern to the Panel that devolution could become a form of provide decisions to dentists. This requires downloading. What seems essential is that all sides patients with complex issues to travel once for collaborate to ensure that resources and authority are aligned with responsibilities, and that there is perfect clarity a diagnosis and a second time and possibly about who does what in any tripartite arrangement. In more to receive treatment.” particular, the federal government should take steps to ensure that health infrastructure and health human Stakeholder Submission resource capacity are adequate to meet the needs of communities before devolution occurs.

In this regard, the Panel was also made aware of the unique challenges and importance of the development of health information technology for First Nations and Inuit. Health Canada has implemented the First Nations and Inuit eHealth Infostructure Program to support the development xxv As First Nations and Inuit health is a federal program, it was not eligible for and adoption of information and communications Canada Health Infoway funding.

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Panel members are aware that the details of administration competition through tendering or bidding for care of these benefits are under review as part of a general contracts. assessment of how the First Nations and Inuit Health Branch discharges its responsibilities. However, Panel • Support pan-Canadian multi-sectoral collaboration members remain troubled by the brief glimpse they were to implement the recommendations of the Canadian given into the state of First Nations and Inuit health and Academy of Health Sciences 2014 report Optimizing healthcare. The general recommendations offered below Scopes of Practice. are therefore no more than a starting point for what must be a fundamental rethinking of how Canada’s governments • Collaborate with provinces and territories, professional work with First Nations and Inuit communities to improve associations and others on a pan-Canadian pay their health services and health status. commission to examine the relative value of healthcare services in terms of cost, provider activity and patient outcomes, thereby helping decision-makers evaluate Recommendations to the professional roles, payments and prices. Federal Government 6 .2 Through the Canadian Institute 6 . 1 Through the new Healthcare for Health Information, in collaboration Innovation Agency of Canada, with interested provinces and territories, alongside federal investments from and with supplemental support from the Healthcare Innovation Fund, the Healthcare Innovation Fund as promote integrated delivery systems needed, pursue the following priorities: across Canada . • Expedite work to develop methodologies adaptable Relevant themes follow: for use in physician capitation payment and in designing integrative or bundled payments based • Per Recommendation 5.1, support provinces, territories, around common episodes of care. and regional health authorities in undertaking large- scale projects that implement highly integrated delivery • Accelerate work in the area of patient reported outcome systems that test new forms of payment where care is measures (PROMs) and patient costing data, including organized and financed around the needs of the patient. case costing data, to create national risk-adjusted patient grouping methodologies and other tools. • Review and identify the best practices in inter- professional shared care, with specific reference to leading integrated delivery models. Promote 6 .3 Through Health Canada, and its adaptation, scaling-up and spreading of similar First Nations and Inuit Health Branch, practices in Canadian jurisdictions. pursue the following priorities . • Develop, implement, and evaluate strategies for ensuring that integrated delivery arrangements in • Co-create a First Nations Health Quality Council, in Canada address social needs and determinants of partnership with First Nations representatives and health, protect and promote health, and prevent disease. patients, and with provincial and territorial governments. This Council would report on the quality • Support provinces, territories, and regional health and safety of care for First Nations across all sectors authorities in adapting, scaling up and spreading and regions. A priority for the First Nations Health partial integration models, e.g. primary care Quality Council should be collaboration with CIHI for commissioning, portfolio funding for disease data development and collection relevant to First management, and assorted bundled payment Nations (see Recommendation 7.6). strategies. Where possible, introduce elements of

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• Co-create a tripartite liaison committee with Inuit representatives and patients, and with the relevant provincial and territorial governments. The mission of this committee would parallel that of the First Nations Health Quality Council.

• Support First Nations leaders, together with willing provinces or territories and other partners, not least the Federal Government to initiate, evaluate and scale up new models of co-governed integrated care in varied locations across Canada. Managed by First Nations, these holistic entities should be modelled on international best practices, such as the Alaska Native Tribal Health Consortium or the Nuka System of Care.

• Facilitate the transfer of federal healthcare delivery programs to interested First Nations communities, working in partnership with First Nations leadership in those communities and the relevant province or territory, while ensuring that service transfers are accompanied by commensurate resources.

• Continuously monitor existing initiatives that transfer responsibility for services, such as the BC First Nations Health Authority, to ensure that devolution strategies are effective, efficient, and equitable.

• Improve the health infrastructure and health human resource capacity on reserve to meet patients’ needs.

• Work with First Nations, Inuit, and other stakeholders to improve the management and responsiveness of the Non-Insured Health Benefits (NIHB) program to enhance access to care through digital technologies and ensure that it provides coverage comparable to other public and private plans.

οο To this end, the federal government should provide quasi-statutory authorities to Health Canada to adjust or expand health benefits offered through NIHB within an overall financial framework set by Parliament.

οο Through the combined resources of the Healthcare Innovation Fund, the Healthcare Innovation Agency of Canada, Health Canada, relevant provincial and territorial partners, First Nations and Inuit communities and others, develop new models of virtual and physical care to mitigate the hardships incurred by patients and families when First Nations and Inuit peoples travel to receive healthcare.

68 | CHAPTER 6 — INTEGRATION AND INNOVATION: THE VIRTUOUS CYCLE OF SEAMLESS CARE Chapter 7 Channeling the Data Deluge, Mapping the Knowledge Frontier

“Hiding within those mounds of data is knowledge that could change the life of a patient, or change the world.” 175

Atul Butte UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Channeling the Data Deluge, Mapping the Knowledge Frontier

From diagnostic images to lab test results, we are now able that precision medicine will bring to Canadian healthcare to digitize more health-related data than ever before. There systems. These two themes converge around the use of are also more data to digitize. For example, advances in advanced analytics on these enriched databases to monitor medical genetics and related fields have generated reams and improve quality of care at all levels of Canada’s of biological data about patients and populations, offering healthcare systems, and to generate new insights into previously-unmatched insights into health status and health and disease. disease risks. Add to this the growing capacity of remote monitoring and wearable technology to collect data on both behavioural patterns and their effect on heart rate, Turning Data into Knowledge blood sugar and other biological parameters, and it has become clear that we are surrounded by health data, which In 1991, the late Martin Wilk reported to the Government offer massive potential for use in improving care. of Canada that health information was “in a deplorable state … like an unmapped forest with undefined Unfortunately, Canada has fallen behind in key areas of boundaries.” 176 A former chief statistician of Canada, Wilk digital health and data-driven care. Earlier chapters have concluded that the problem was one the Panel continues already highlighted that we are failing to make best use to see in Canadian healthcare – fragmented effort, and of data that are already available, and lagging in lack of collaboration and coordination. Wilk called for a implementation of electronic health records (EHRs) – the single national agency that could foster “productive secure and private lifetime records that describe a person’s incrementalism.”176 health history and care. This work led to the creation in 1994 of the Canadian Institute for Health Information (CIHI), profiled briefly “Medical students and residents are currently in Chapter 3. Today CIHI has a wide range of data handling patients with 1980s charts.” holdings. Its profiles of health system performance have repeatedly informed this report, and have a wide impact Participant at Regional Consultation nationally as governments, provider organizations and institutions, and researchers all use CIHI analyses and customized databases. The organization is respected domestically and abroad, and has maintained a high Canada is also woefully unprepared for the wave about to degree of inter-jurisdictional collaboration as well as crest as the revolution in biological characterization of positive stakeholder relations. individuals ushers in the era of precision medicine. Precision medicine is an approach to medicine in which diagnostic, At the same time, healthcare data are collected and analyzed treatment, and prevention strategies are tailored to sub- independently by many other players, including provinces populations of patients or even personalized at the and territories, health quality councils, regional health individual level. Canada has global research leaders in authorities, and individual healthcare organizations. While various aspects of precision medicine, but as will be outlined the Panel was gratified by evidence that Canada’s healthcare below, we urgently need a strategy for moving precision systems are increasingly data-driven, stakeholders medicine to the clinical front-lines, and for turning the cautioned that these efforts remain fragmented. sophisticated data arising from such clinical encounters back into generalizable research findings. Indeed, the Panel’s review suggests that Canada’s health data infrastructure needs to be enhanced. Specifically: This chapter accordingly focuses on these two inter-related themes. It deals first with issues surrounding health and • The utility of existing performance measurement medical records under the prevailing medical paradigm, information is often limited due to lengthy data lags. and then considers some of the challenges and opportunities Clinicians and administrators need real-time or near

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real-time data and information in order to inform their come from investments in ensuring that individual patient decision-making. records are rapidly digitized in standard formats that permit easy and quick aggregation in servers for online access. • Providers and administrators are under increasing This leads logically to the question of the status of digital pressure to collect more data, but do not see returns health record-keeping in Canada. in terms of meaningful and actionable clinical and administrative information. The Emergence of the Electronic • Performance and health outcome reporting efforts Health Record happen at multiple levels by multiple organizations, generating a deluge of information, a sense of indicator Unlike the consensus-based approaches that have guided chaos, and uncertainty among providers and the development of pan-Canadian health databases, the administrators on what is credible, what is a priority, diffusion of electronic health and medical records has been and how to use the right information to make better based on centralized investment in large-scale projects by decisions. Canada Health Infoway. Infoway has partnered successfully with all jurisdictions to make big investments in health • Access to data and information among patients, info-structure over the past fifteen years. Obvious progress providers, researchers, and policymakers is inconsistent. has been made in developing a core backbone of health The Panel heard that data access is particularly difficult information and communications technology (ICT) across for clinicians and researchers in certain provinces who Canada (e.g., patient and physician registries, diagnostic have no choice but to buy raw data or customized imaging systems, lab information systems, etc.). analyses from other jurisdictions. For clarity, the Panel notes that EHRs consist of information • Data gaps still exist in important areas including but not from a variety of sources, including hospitals, clinics, limited to primary care, where the majority of interactions doctors, pharmacies, and laboratories.177 EHRs can also with the healthcare system occur. As already noted in be broadly understood to encompass electronic medical Chapter 6, another serious gap occurs with First Nations records (EMRs), which are the in-office systems used by and Inuit communities, where the lack of health outcomes healthcare providers to record information during a and system performance data hinders resource planning patient’s visit. The progress in ICT implementation is clear: and delivery. As well, healthcare purchased by individuals, 56 percent of primary care physicians reported that they private insurance companies, and employers makes up used EMRs in 2012, up from 37 percent in 2009 as noted 30 percent of health spending in Canada.5 This sector is in figure 7.1.178 Although more recent information provided very poorly understood at present. by Canada Health Infoway suggests this figure is now over 75 percent, Canada is still playing catch-up. Stakeholders expressed particular concern that the available information systems do not provide actionable Not just in family physicians’ offices, but more generally, intelligence. They made repeated calls for better data Canada has not yet reached full deployment of EHRs across linkage – bringing together multiple sources of data that the continuum of care. The comparatively slow roll-out relate to the same individual, family, place or event. CIHI of EHRs has put Canada at a disadvantage compared to was acknowledged as a leader in creating high-quality better-performing OECD peers. Shortfalls inevitably data holdings, but lengthy delays in cleaning the data and impede the quality and efficiency of front-line healthcare, standardizing reporting mean that the information that leading to wasteful duplication of tests, incompletely can be used is always retrospective, and not useful for informed clinical decisions, and medical errors. Limitations real-time decision making. in EHR utilization also impede the development of higher level information systems and databases, with consequences The Panel’s view is that many of these shortfalls relate not for policy-making, quality management, healthcare to back-end data usage but front-end data collection and research, and data-driven innovation. standardization. Access to data in “real time” will only

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Figure 7.1: Primary Care Physicians’ Use of Electronic Medical Records in Their Practice, 2009 and 2012

99% 98% 98% 97% 97% 97% 96% 97% 95% 100% 92% 94% 88% 90% 82%

80% 72% 69% 68% 67% 70% 60% 56% 46% 50% 41% 37% 40% 30% 20% 10% 0% France Canada Norway Sweden Australia Germany Switzerland Netherlands New Zealand United States United Kingdom 2009 2012

Source: Adapted from: 2009 and 2012 Commonwealth Fund International Health Policy Survey of Primary Care Physicians. Available from: http://www.commonwealthfund. org/interactives-and-data/international-survey-data

“Outlaw the fax machine in doctors’ offices … for 6.75 million residents in the greater Toronto area, It is absolutely unacceptable that fax machines across hospitals, community care access centres, community health centres, long term care facilities, still exist in medicine, it is absolutely and others. unacceptable that e-mail is not accepted in • Conformity in EHRs across jurisdictions is also mixed, doctors’ offices. These things must change and as provinces and territories determine their own degree must change tomorrow as a national standard.” of adoption, standards and timelines, thereby impeding the ability for jurisdictions to share data and Participant at Industry/Government Roundtable systems.179,180

• The lack of data harmonization and common data Given the rapid changes in health information technology standards and elements between EHR systems limits (e.g., mobile health technologies and virtual care options) the development and analysis of data sets that can be and the growing demand by patients to gain access and used for research, evaluation, predictive risk analysis, make use of their own health data (as discussed in chapter real time decision-making and quality improvement. 5), it is fortunate that the adoption and use of EHRs is accelerating. However, other challenges persist: • Implementation of electronic records is not the same as meaningful use. A 2014 National Physician Survey • Point-of-care access to fully interoperable EHR is found, for example, that out of all physicians who plan limited, restricting the ability of healthcare providers to use EMRs in the next two years, only 40.3 percent to seamlessly share patient health information with planned to use their EMRs for secure transfer of patient one another. A 2012 Commonwealth Fund survey information, and only 52.3 percent for drug interaction found that only 14 percent of primary care physicians warnings.181 can electronically exchange patient summaries and test results with doctors outside their practice.178 Other jurisdictions have focused more closely on meaningful Progress is happening in pockets across Canada, such use of EHRs, as summarized in the next section. as ConnectGTA which aims to deliver a regional EHR

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Meaningful Use can also provide advanced business intelligence and predictive analytics. Here, the US Veterans Health As one stakeholder in the Panel’s consultation put it, EHRs Administration (VHA) is an instructive example of the are not just a way for doctors to digitize the notes from power of interoperable, harmonized EHRs. Serving more their meetings with patients. To reap full benefit, healthcare than six million veterans across the country, the VHA has providers – and others, such as payers – must also be able long been recognized as a pioneer in electronic health to use EHRs to their fullest extent “to improve quality, information systems. These systems now generate a wide safety, efficiency, and reduce health disparities; engage variety of local and system-wide performance reports, patients and family; improve care coordination, and covering clinical, financial and administrative matters – population and public health; and, maintain privacy and with the option to drill down to the level of individual security of patient health information.”182 providers and patients. More recently, the VHA has turned its attention to use of these data for more advanced “EHR adoption is not just having a computer analytics, including predictive analyses that enable better 184 in , but knowing how to use it.” planning and earlier intervention in at-risk groups.

Participant at Regional Consultation The latter observations speak to the power of what is commonly termed Big Data.

This scope of use is achieved in only a few healthcare Big Data in the Public Interest systems or plans. However, in many countries, including the US, a narrower definition of “meaningful use” is The hype that has turned Big Data into a meme is codified in law and achieved in stages. The first stage unfortunate. Worldwide, the amount of digitized and involves data capture and sharing (e.g., recording chart stored data is indeed growing at a staggering rate. Not information). The second hinges on more advanced just information technology companies and other service processing (e.g., using decision support to improve enterprises, but governments and publicly-funded performance on high-priority conditions), while the third healthcare systems are accumulating truly massive amounts requires demonstration of improved patient outcomes. of stored data. All too often, however, no one has much idea how to make meaningful use of these collections or Canada Health Infoway has also articulated levels of data sets. The data gathered are often illogically organized, enhanced EHR use (called clinical value targets). Unlike complex, incompletely standardized, uneven in quality, the US which supports achievement of each stage with and difficult to analyze. financial incentives to providers and healthcare organizations, there are few pan-Canadian incentive/ These data sets have forced the development of hypothesis- disincentive structures in place for using/not using EHRs free approaches to analytics based on pattern recognition. at these levels.183 Canada has world leaders in this field, most notably Geoffrey Hinton, who now divides his time between the This situation speaks to the changing priorities in the realm University of Toronto and Google. The challenge of sorting of health information technology. As already signalled in through these types of data sets also accounts for the Chapter 4, the Panel doubts that Infoway in its current phenomenon of hackathons, in which governments or configuration will make an easy transition to mobile health industries open up anonymized or limited versions of and high-touch activities such as promoting meaningful their data sets, and convene a competition to see what use of EHRs with front-line providers (see Recommendation individual or team can make the most creative use of the 4.4). Downstream integration with the proposed Healthcare data at hand.185,xxvi Innovation Agency of Canada should prove synergistic.

xxvi In another example of this trend, as this report was going to press, the Centers Even the first stage of ‘meaningful use’ leads to the for Medicare and Medicaid Services announced that they would be opening production of digitized records that, if compiled with up their data to innovators and entrepreneurs in order to drive transformation in the healthcare system. Centres for Medicare and Medicaid Services. CMS common standards, can be aggregated for higher-level announces entrepreneurs and innovators to access Medicare data. Washington analysis by provider institutions and organizations. Such (United States): Centres for Medicare and Medicaid Services; 2015 June. Available from : http://cms.gov/Newsroom/MediaReleaseDatabase/Press- analyses can not only achieve the goals quoted above, but releases/2015-Press-releases-items/2015-06-02.html

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While the excitement about advanced analytics and large Patient-Centred Data data sets is justifiable, the Panel cautions that the strategic assembly of reliable data will usually trump self-defeating Just as earlier chapters have highlighted the need for initiatives based on what might be termed, ‘endless heaping patients to access their own health records and for and random digging’. For example, by linking together healthcare systems to become more patient-centred in several health administrative databases and studying all dimensions, so too should health data be focused on physician referral patterns, researchers from the Institute patients. for Clinical Evaluative Sciences were able to identify nearly 80 informal multispecialty physician networks or “self- Patient Reported Experience Measures (PREMs) represent organizing systems of care that collectively serve their large one tool. In the US, the Agency for Healthcare Research panels of patients.”186 This discovery formed the theoretical and Quality has had a voluntary, standardized patient basis for the Ontario Community Health Links initiative experience survey program in place since 1995. The described in Chapter 5, which funds and supports teams aggregate results are routinely made public. In contrast, of networks of local healthcare providers to care for patients patient experience surveys in Canada are administered with chronic complex conditions. using many different tools and data collection methods, and cannot be aggregated for comparative purposes. Other provincial groups are also internationally recognized for leadership in linking health and social care data sets. The Panel was encouraged to learn about the emergence In this regard, the Panel notes the success of initiatives of the Canadian Patient Experience Initiative, a collaboration such as PopData BC and the Manitoba Centre for Health between the CIHI, Accreditation Canada, The Change Policy, long-time leaders in this area and well supported Foundation, the Canadian Patient Safety Institute, members by governments. More recent initiatives include the Alberta of an inter-jurisdictional committee, and experts in the Child and Youth Data Laboratory, a research initiative that field. CIHI is also collaborating with several provinces to links and analyzes administrative databases across multiple develop patient experience indicators that can inform child- and youth-serving government ministries, including performance improvements over time and support health, education, justice, and Aboriginal relations.187 All benchmarking across Canada. these efforts have shown how big datasets can yield practical insights for innovation in policy and administration. Similarly, Canada’s collection of healthcare data would be The latter examples have the particular advantage of enriched by use of Patient-Reported Outcome Measures highlighting the interconnectedness of the health and (PROMs). Patient-reported outcomes “are any reports social service sectors. As the Panel has noted, integration coming directly from patients about how they function or of health and social services remains a weak point of feel in relation to a health condition and its therapy, without Canada’s healthcare systems – one that will become more interpretation of the patient’s responses by a clinician, or problematic as the proportion of seniors grows. anyone else.”189 PROMs, currently under development at CIHI, are an alternative to more traditional health outcomes From an economic perspective, data-driven innovation is measures such as mortality or morbidity. When collected widely seen as holding potential for enhanced productivity, in a systematic fashion, as is done within the England’s efficiency gains, and competitive advantages. The OECD National Health Service for patients undergoing selected has identified publicly administered sectors like healthcare elective surgeries, PROMs can offer valuable performance and education as those standing to gain the most from improvement data.190,191 this model of innovation: “These sectors employ the largest share of occupations which perform many tasks related to The collection and analysis of reliable, comparable, the collection and analysis of information with, however, actionable data on patient experience and patient-reported a relative low level of computerisation.”188 The Panel agrees, outcome measures is an essential to Canadian efforts aimed and will return in its recommendations to steps that must at making our healthcare systems more patient-centred.111 be taken to ensure maximum impact from data-driven The Panel urges intensification of all these efforts, consistent innovation in Canadian healthcare. with recommendation 6.2 above.

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Figure 7.2: Genome Sequencing Costs over Time

Cost per Genome $100M

$10M Moore’s Law

$1M

$100K

$10K

$1K

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Adapted from DNA Sequencing Costs [Internet]. Bethseda (United States): National Human Genome Research Institute; 2014 Oct 31. Available from: http:// www.genome.gov/sequencingcosts/

Precision Medicine: A Data-rich vistas. Third, chemistry and biotechnology have converged, allowing the production of an enormous range of bespoke Knowledge Frontier therapeutic molecules. And fourth, biomedicine’s ability to manipulate the body’s own immune and inflammatory As noted above, precision medicine has been enabled by responses has grown exponentially – a critical factor in breakthroughs in biology that accelerate unprecedented curing or controlling a wide range of diseases. characterization of individuals. The goal is that diagnostic, treatment and prevention strategies will be tailored With all these advances, what was once a single condition, increasingly to sub-populations of patients or even defined by clinical features, is often found to be several individuals, by combining standard clinical, laboratory, and different disorders that happen to look roughly similar at psychosocial assessments with measurements of a range the bedside or with standard laboratory tests. A patient of sophisticated biomarkers. with a cancer that has stopped responding to intravenous chemotherapy can now contemplate surprising and truly A key step was the completion of the Human Genome personalized options, such as oral treatment with a drug Project in 2003. Since then, improvements in technology used for high blood pressure or a now little-used antibiotic. have dramatically reduced the costs and time required for genetic testing and genomic sequencing (as illustrated This represents a radical shift in thinking. In healthcare in figure 7.2), broadening their potential to a wider range evaluation, pioneering approaches in health technology of applications and exponentially increasing the potential assessment and evidence-based medicine were predicated amount of genetic information available to clinicians on creating standardized treatment pathways and protocols. and researchers. The goal was to help clinicians and policymakers make decisions that would allow the largest number of patients Four other areas of development have accelerated this to achieve the best results. In particular, the foundations transformation. First, more sophisticated medical imaging of analysis were and remain probabilistic, with analytical is offering unprecedented clarity about not just internal techniques borrowed from epidemiology and psychometrics. body structures but their function. Second, the inter-related Evidence-based medicine – a Canadian innovation arising areas of stem cell science, tissue engineering and from McMaster University’s – remains an regenerative medicine have opened up new therapeutic important toolkit of ideas for managing a clinical realm

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where decisions reflect a struggle to do the right thing in This case illustrates the potential consequences of imprecise the face of the play of chance. For example, because many prescribing. At best, when drugs are not a good fit for the drugs have only a small chance of benefiting a given patient, patient they are wasteful and expensive and may require the randomized trials must be very large to reliably assess drug use of second or third drugs to treat the side-effects from the effectiveness, or combined through meta-analysis. first drug. At worst, adverse drug reactions can lead to poorer Interpreting imprecise laboratory tests has likewise required quality of life, heavier healthcare utilization, or even increased trade-offs between the chances of false-positive and false- risk of death. Seniors in particular are disproportionately negative results. affected by adverse drug reactions, and are also more likely to take multiple . Estimates suggest that Precision medicine, in contrast, has the ambition of allowing pharmacogenomics testing could be relevant for 15 to 25 clinicians to pursue a more deterministic approach. percent of all clinical decisions about existing prescription Originating from root biological causes and pathways, new drugs.192 As new, more targeted drugs become available, biomarkers can radically enhance the signal to noise ratio genotyping and other biomarker information will become in laboratory tests or tumour characterization. And by increasingly important for drug selection. targeting the right patient with the right drug at the right time, precision medicine may well reduce the collateral Emerging evidence is also illuminating the linkages injuries – and waste – associated with the shotgun between imprecise prescribing, mental health issues, and pharmacotherapy that currently prevails. economic impacts – both direct and indirect. For example, in a study of patients with depression and anxiety, patients All that said, the need for a disciplined and critical who were on antidepressants or antipsychotics but who approach to clinical research evidence is not likely to were later found to be poor metabolizers of these drugs disappear any time soon. The applicability of precision took more sick leave from work, made more disability medicine to many common conditions remains unclear. insurance claims, and used more medical care. On average For reducing one’s risk of most common diseases, this cost an additional $5000+ in direct care costs per individualized prevention through precision medicine is patient over those whose was a better a side-show at present; behaviours based on common metabolic match.193 sense and general knowledge remain the sensible way forward for most Canadians. Thus, the question Dr. James Kennedy, Head of the Psychiatric Neurogenetics contemplated by the Panel was not how to suddenly Section of the Centre for Addiction and Mental Health in change clinical paradigms, but how to ensure that patients Toronto, shared additional insights with the Panel. in Canada’s healthcare systems will be able to benefit Kennedy’s team has already found that a substantial from these fast-breaking changes in the near future and minority of patients are either very fast or very slow medium-term as they become ever more pervasive. metabolizers of many powerful drugs used routinely in . They estimate that literally thousands of people Panelists received a snapshot of that future at a round-table with depression alone would benefit from having this with leading clinicians and scientists. For example, at the information to guide their choice of drug and dosing. London Health Sciences Centre’s Personalized Medicine Kennedy is now moving forward with a randomized trial Clinic in Ontario, patients benefit from clinicians who can to test these strategies in practice. Even slight improvements provide on-site pharmacogenetic expertise, tailoring drug in medication management and adherence could improve treatments according to a patient’s genetic makeup. In the lives of many individuals with severe mental illness,194,195 speaking with the Panel, Dr. Richard Kim, director of the while saving very large costs in emergency department clinic, outlined the story of the 35-year-old man with visits and hospitalizations. Crohn’s disease and mild renal impairment. Under standard treatment approaches, the patient would have received a In the same session, panelists were apprised of new ways medication dosage leading in many instances to adverse of diagnosing and treating cancer, genetically-conditioned outcomes, such as severe bone marrow suppression, sepsis differences in responses to a heart drug that caused a and death. However, because the man underwent completely wrong-headed interpretation of a major genotyping, he was given a dramatically lower dosage and randomized trial, and ground-breaking research in the experienced no related adverse effects. application of genomics to understanding nervous system diseases such as and spinal muscular atrophy. These impressive advances, and additional information

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gathered by the Panel, affirmed the standing of Canadian research, recently launched an AU$25 million grant research and researchers in this field. The Panel would competition to fund research on “Preparing Australia be remiss, therefore, not to applaud the investments in for the Genomics Revolution in Health Care.” As one applied genomics and precision medicine research that of the largest single grants in the Council’s history, have been made by CIHR, Genome Canada, many other the funding will support a multi-disciplinary, cross- national foundations and grant-making bodies, provincial national research team that will explore how medicine research agencies and ministries, private industry and can improve precision for disease prevention, other supporters. diagnosis, and treatment; analyze the economic and policy impacts genomic data will have on the Despite these advances, the Panel also heard warnings healthcare delivery system; and develop intelligence from clinicians, researchers, and healthcare stakeholders on how genomics can be applied in real world that Canada may squander its research investments without healthcare settings. 196,198 a more strategic approach. What is missing, in particular, is a wider-angle strategy to ensure that, from the standpoint The US, too, has entered the fray. In his 2015 State of the of application and innovation, Canada is competitively Union address, President Obama announced the Precision positioned. In this work, not only is CIHR a potentially Medicine Initiative, starting with US$215 million in the valuable partner, but CIHR’s SPOR initiative, described 2016 Budget. 199 In the words of the White House release, earlier, represents a network that would be a useful launching pad for implementation of any strategy. “The potential for precision medicine to improve care and speed the development of new treatments has The appeal of working with CIHR rests on the fact that, only just begun to be tapped. Translating initial in this field more than others in healthcare, the lines successes to a larger scale will require a coordinated between research, development, clinical application, and and sustained national effort. Through collaborative innovation are blurred. Bio-banks feed databanks and public and private efforts, the Precision Medicine vice versa. Instead of random associations, big data Initiative will leverage advances in genomics, emerging analytics drive out results with a biological rationale that methods for managing and analyzing large data sets can easily be tested. Translation into clinical studies ensues while protecting privacy, and health information at a much faster pace than has previously been possible. technology to accelerate biomedical discoveries. The This rapid cycle creates enormous potential for discoveries Initiative will also engage a million or more Americans that can be commercialized, but in an era of intense to volunteer to contribute their health data to improve competition, other jurisdictions are unlikely to buy health outcomes, fuel the development of new Canadian biotechnology if the product cannot achieve treatments, and catalyze a new era of data-based and domestic market entry. more precise medical treatment.” 200

The Panel accordingly sought out examples of jurisdictions Notably, the funding included a special allocation to the taking steps to turn the healthcare system itself into a Office of the National Coordinator for Health Information living laboratory for precision medicine. Two came quickly Technology, to “support the development of interoperability into view. standards and requirements that address privacy and enable secure exchange of data across systems”.200 • Genomics England, a subsidiary of England’s National Health Service (NHS), recently announced the 100,000 The Panel was struck by the clarity and foresight of these Genomes Project, which aims to sequence the genomes announcements. In the case of the US, the investments of NHS patients with rare diseases or cancer and their are partly enabling, and partly operational around a large families. This genomic information will be linked to volunteer cohort. In Australia, the investment is enabling clinical data, providing a wealth of information to – albeit much more limited in scope than suggested by the enable the provision of genomic medicine at the Panel’s synthesis of the challenges and opportunities arising bedside and to promote new medical and scientific from this field. discovery.196,197 The one Canadian initiative that partly reflects these models • The National Health and Medical Health Research comes from Newfoundland and Labrador. On a visit to St. Council, Australia’s granting council for health John’s, Panel members heard first-hand about Newfoundland’s

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Translational and Personalized Medicine Initiative (TPMI). jurisdictions, opening the door for the discovery of patterns TPMI was designed with the goal of using advanced computer and insights about health and disease that would otherwise infrastructure, provided by IBM, to integrate electronic health remain obscure. information (e.g., a patient’s health history, laboratory results, family genetic history), improvements in clinical practice, What does the Panel conclude from this high-altitude and healthcare research.187 Because a limited number of survey? Founder Families make up a substantial portion of Newfoundland’s population, there is an unusual concentration First, without a cogent strategy, without the right of rare genetic disorders on the island.201 TPMI’s design turns infrastructure – both biobanks and databanks, without that problem into an opportunity. By targeting patients and mechanisms to translate successful discoveries into both families at high risk for certain diseases (e.g., various , improved clinical care and exciting new businesses, sudden heart attacks due to cardiomyopathy, inherited Canada runs a risk of wasting opportunity and money deafness, and inflammatory arthritis), it aims to improve care – and falling even further behind our peers. while reducing healthcare costs and generating novel research findings. The rest of Canada can and should learn from TPMI Second, the data storage and handling demands of precision and its work to make Newfoundland a living laboratory for medicine may well exceed those anticipated in current plans precision medicine. for institutional and jurisdictional information technology. Day to day clinical applications at a given clinical site may require The Panel also observed that a project under the auspices less ‘crunching power,’ but data-driven innovation and formal of Global Alliance for Genomics and Health (GA4GH) research studies will require major analytical capacity. The presents a contrast to the ‘islands of genetic discovery’ situation is more complex given Canada’s under-developed model pioneered by Iceland and adapted by Newfoundland. healthcare info-structure, and the fact that the lines are blurred, The Matchmaker Exchange is co-led by Dr. Kym Boycott as noted above, between data-driven innovation in precision from the Children’s Hospital of Eastern Ontario. Using medicine and its clinical applications. Furthermore, neither academic pediatric hospitals worldwide as living the Canada Foundation for Innovation nor CIHR have been laboratories, this initiative enables more efficient entirely clear about what they will fund in the realm of Big characterization of rare genetic diseases by multi-national Data infrastructure and related operational requirements for matching of phenotypes and genotypes. health research and healthcare delivery. The Panel believes a roadmap must be drawn to determine the respective The Panel views these as complementary strategies for responsibilities and contributions of the various federal agencies understanding rare diseases. However, experts have (Canada Foundation for Innovation, CIHR, Genome Canada, emphasized to the Panel that the challenges are very Infoway, and CIHI) as well as the provinces and territories that different in tackling the most prevalent chronic disorders. have primary responsibility for healthcare operations. Canada’s relatively small size means that researchers will instead need to collaborate across provincial, territorial, Third, the Panel believes that, in responding to the and even international boundaries to develop study emergence of precision medicine, Canada must be guided populations of sufficient size that will allow characterization by several objectives: of disorders with extremely complex genetic and environmental causes. 1. Developing mechanisms to adopt, scale up, and contribute new clinical insights from across the global The GA4GH is focused on fostering those collaborations. field of precision medicine; Both Genome Canada and the CIHR are members of this global alliance, along with member organizations from 2. Securing a global leadership position in selected fields thirty other countries. GA4GH’s aims to create a common of research relevant to precision medicine – a goal framework of harmonized approaches that “enable the where CIHR is obviously the primary agency; responsible, voluntary, and secure sharing of genomic and clinical data”. 202 Its secretariat is co-hosted in the US, UK, 3. Establishing a global leadership position in the and Canada; the Executive Director, Peter Goodhand, is systematic uptake and iterative improvement of these based at the Ontario Institute for Cancer Research. By methodologies as applied to clinical care in healthcare setting common standards, the hope is that large amounts systems across Canada; of data can be aggregated and analyzed across international

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4. Ensuring that national and international collaboration “Canada is a little bit too blue sky and open air is maximized, and that data are shared widely with around genetics and the use of personal due regard for privacy and security; genetic testing… quite frankly, no one knows 5. Fostering the development of the Canadian talent pool who is protected, what is what.” not only in the relevant biological and clinical fields, but in data analytics and software development; and Participant at Industry/Government Roundtable

6. Promoting the commercialization of made-in-Canada precision medicine concepts. As of June 2015, Canada has no specific protections in place to prevent genetic discrimination. However, there In sum, the rapid rise of precision medicine offers both an is growing awareness that Canada needs ethical, legal and opportunity and a challenge for Canada. Our response social parameters to guide the collection and use of this will help define the trajectory of our healthcare systems information. The Panel addresses this issue in a for the next generation and beyond. The Panel views action recommendation below. on this front as an extremely high priority. Open Data Preventing Genetic The Open Data movement has gained momentum world- Discrimination wide even as anxieties about privacy and data security have grown. Institutions, enterprises, and jurisdictions Although genetic information has the potential to be a alike are struggling to find the right balance – not an easy powerful tool for health, this information could also be matter if health-related data are involved. used to discriminate against individuals. For example, insurers, financial lenders, or employers may be more Earlier, the Panel emphasized that general privacy negatively inclined towards individuals who are known to concerns must not be invoked to justify denying patients be genetically at risk of developing a serious illness or access to their own health records, or to excuse foot- chronic condition. The Panel has heard anecdotally that dragging on the development and implementation of there are patients in Canada who have been counselled EHRs. The question here, however, is different. Assuming by their physicians not to undergo voluntary genetic testing, that the data have been anonymized – i.e., stripped of given the lack of legal or policy safeguards to protect them identifiers – who should have access to what data sets and their families from discrimination by third parties. and on what terms? Related reports have come to the attention of the Canadian media, as well as the Standing Senate Committee on The question arises because researchers, software Human Rights.203,204 application developers, journalists, and a range of other users are keenly interested in these data sets. Recognizing these risks, other countries have enacted legislation or other policies to protect their residents from The case for making reliable analyses on health system discrimination on the basis of genetic makeup. For example, performance widely available to the public is well- in France, the law stipulates that genetic tests may only established. Some provinces are well along this road, and be taken for valid medical or scientific reasons, and there CIHI has created online tools that allow website visitors are penalties for misuse.205 In the UK, insurers and to examine and compare the performance of healthcare employers are responsible for handling genetic information providers on multiple levels. The Panel observes, however, according to existing laws governing the use of personal that the CIHI analyses could be more accessible, more information, and British insurers have voluntarily adopted informative and more widely publicized. In any case, a policy to not ask or pressure individuals to undergo sharing pre-digested data through an interface is not the genetic testing in order to obtain insurance, with some same as sharing unprocessed data. exceptions.205 The US enacted the Genetic Information Non-discrimination Act (GINA), legislation that limits the ways that employers and insurers may use genetic information to protect individuals from discrimination.

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“Somehow, the governance of Canada’s wealth While there is much to be done, the Panel sees that most of data needs to be reformed so that data of the foundations have been laid and the necessary raw custodians become ‘data stewards’ – they are materials are at hand. Enormous progress can now be made in short order with the right strategies, serious mandated (and provided adequate resources) investments, political will, and a resolute commitment to not only to protect confidentiality, but also to inter-jurisdictional collaboration. facilitate bona fide research.” Recommendations to the Stakeholder Submission Federal Government

On that latter score, some data custodians, including CIHI, 7 1. Through the Healthcare have a good record of making anonymized raw data Innovation Fund and new Agency, available to a wide range of interested parties for their own use. Others do not. A comprehensive review of access to develop and initiate a national Strategy health data for research was recently undertaken by the for Implementation of Precision Council of Canadian Academies. A key finding of this Medicine, in concert with provinces, review is that inter-provincial barriers to data-sharing may be impeding the work of academic health researchers and territories, healthcare and health the aims of national data platforms with strong relevance research agencies, and a range of to health and healthcare (e.g. the Canadian Longitudinal Study on Aging).206 In the Panel’s view, Canada as a relevant stakeholders and experts . federation cannot have it both ways. We cannot trumpet the virtues of decentralization as a vehicle for ‘natural • This field is characterized by a blurring of the lines between experiments’ in public policy, and then refuse to share applied research, innovation, and implementation at scale. appropriately anonymized data so as to permit independent The Strategy should seek to leverage Canada’s diverse assessments of the results of those experiments. A populations and single-payer healthcare systems as a recommendation on data-sharing follows below. competitive advantage.

The Panel is reluctant to add a lengthy coda to what is • The Strategy should include development of a roadmap already a long chapter, and will recapitulate only a few of steps needed to ensure that Canada’s health points. After what has been written above, it may be information and communications technology can superfluous to observe that Canada has not made optimal support data-intensive models of care and the rapid- use of information and communications technology in the cycle innovations that characterize this field. nation’s healthcare systems. Acceleration of the adoption and meaningful use of EHRs remains a necessary • The Strategy should focus on: precondition. The rapid development of precision medicine and the related data handling challenges and opportunities οο Developing and implementing mechanisms to add to the urgency of the situation. The goals, obviously, adopt, scale up, and contribute new clinical insights should be improved collection of data, and effective from across the global field of precision medicine; transformation of those data into usable intelligence for οο Establishing a global leadership position in the patients, providers, administrators and policymakers. systematic uptake and iterative improvement of Opening up anonymized data sets to a wide variety of Precision Medicine methods as applied to clinical stakeholders is consistent with the principle of data-driven care across Canada; innovation that will be essential if Canada’s healthcare systems are to thrive in the era of applied genomics and οο Ensuring that national and international precision medicine. collaboration is maximized, and that data are shared widely with due regard for privacy and security;

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οο Fostering the development of the Canadian talent 7 .4 With support from the Healthcare pool not only in the relevant biological and clinical fields, but in data analytics and software Innovation Fund, and building on development; and current efforts by organizations such οο Promoting the commercialization of made-in- as CIHI, provide greater transparency Canada precision medicine concepts and tools. about healthcare in Canada, by:

7 .2 . Through the Healthcare • enabling more accessible and user-friendly information Innovation Fund, and in partnership on areas including patient satisfaction, quality, safety, efficiency, effectiveness and health outcomes with federal and provincial research and innovation agencies, accelerate • leading “open data” efforts, by making data available the implementation of the above- to a wide range of stakeholders, including the public, to enable development of new tools and approaches noted Strategy by assessing and scaling up models of care in the field • developing partnerships to build the capacity of health system stakeholders to use data for health system of Precision Medicine . improvement

• Potential starting points with wide impact include • exploring mechanisms to gather and share data about pharmacogenomics in diverse clinical fields, and activity in healthcare’s private sector – corresponding precision/personalized cancer care. to the 30 percent of spending that is not supported by public funds. οο A major commitment of funds will be needed to launch the broad Strategy across Canada as well as to effect clinical scaling-up in select fields. 7 .5 Through Infoway initially and then through the Healthcare Innovation 7 .3 Convene a federal, provincial Agency of Canada, accelerate the and territorial dialogue on a pan- deployment of interoperable electronic Canadian framework that will protect health records across points of care, Canadians while putting put Canada at including efforts to assist providers the forefront of applied genomics and and payers in meaningful use and precision medicine, including: prioritizing the creation of online portals where patients have mobile • Regulatory and legislative amendments to prohibit access to their own records . genetic discrimination, such as changes to the Canadian Human Rights Act, the Criminal Code, the Personal Information Protection and Electronic Documents Act, • Ensure future investments in health information and the federal Privacy Act. technologies are standardized, interoperable, linked across multiple sites, and available to third parties for • Policies to enable broad sharing of appropriately assessment of performance. anonymized data across and within jurisdictions.

οο This is critical not only for rapid innovation in the field of precision medicine, but for enhancing applied health research and data-driven innovation in Canada’s healthcare delivery systems.

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7 .6 Through the Canadian Institute for Health Information, and in partnership with the First Nations Quality Council, address the significant data gaps that exist in the area of First Nations health, providing a fuller picture, of First Nations health status, as well as access to care, and quality of services .

82 | CHAPTER 7 — CHANNELING THE DATA DELUGE, MAPPING THE KNOWLEDGE FRONTIER Chapter 8 Improving Value in Healthcare

“Many of the business models healthcare has been using for half a century that reward high volume care — how much you do rather than how well you do — will have to be modified. This is one major challenge in adopting healthcare reform. To deliver patient-centered care, to realize that often doing less rather than more may be better for the patient, the infrastructure of healthcare and the practice culture will both need to change. We can do it, but it will be a difficult transition.”207

Don Berwick UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Improving Value in Healthcare

Recently, there has been no shortage of dire prognostications Measuring Value: the about the future financial sustainability of Canada’s Cornerstone of a High- healthcare system. David A. Dodge and Richard Dion estimate that between now and 2031, health spending as Performing System a share of (GDP) could increase from current levels to anywhere from approximately 15 It is difficult to imagine running a business without to 19 percent.208 The Parliamentary Budget Officer understanding production costs or the value of products estimates that publicly-funded healthcare costs could to consumers. Yet in Canadian healthcare, this has been increase from 7.4 percent currently to over 13 percent of the historical reality. In the past, medical fees were – and GDP in 2087.209 Projections such as these do spark debate still are – negotiated by governments and physician about how much society should spend on healthcare organizations with limited consideration of the measurable relative to other social and economic priorities (i.e., value of different services to patients.210 Hospital budgets education, social programs, etc.). But the numbers also were based on historical spending.158 Drugs and medical make assumptions about demographic, social and devices that meet regulatory safety requirements would economic drivers that are unlikely to hold. spill into the market and be diffused with uneven evidence of their cost-effectiveness in different groups of patients For now, instead of spinning further out of control, who receive them – a situation that has changed only healthcare spending growth has moderated dramatically. slightly.211 Expensive technology solutions were routinely Real per capita spending on healthcare has actually adopted without a proper assessment as to their value – decreased by 1.2 percent from 2011 to 2014,5 something again, only somewhat improved today. And little if any that has not been seen since the mid-1990s. This information was collected on what patients think about phenomenon is not unique to Canada. Almost everywhere their experience with the healthcare system – somewhat in the industrialized world, governments are capping or better now, but a far cry from what one encounters dealing reducing healthcare spending growth in an unprecedented with many private businesses. push to address growing debts and deficits.5

On the other hand, Canadian experience during the 1990s Adding Value to Value: Porter’s provides a cautionary tale. Faced with a deep recession Contribution and high indebtedness, governments took measures to reduce the growth in health spending, including cutting medical school enrolments, capping medical fees and The term “value” has been popularized by competition imposing utilization controls, closing hospital beds, guru Michael Porter as “the health outcomes achieved freezing hospital budgets and delisting services. While per dollar spent”. Health economists have long used this helped to reduce the growth in health spending to such constructs in different forms of cost-effectiveness about one percent in real per capita terms over a four analysis. Likewise, long before Porter, countless year period, public concerns about access started to build.5 academic papers rigorously explored the place of When economic growth picked up again, governments process and outcome assessments in healthcare quality were forced to open up the spending tap once more. assurance. While some academics may take a dim view Hectic spending escalation resumed. of Porter’s failure to acknowledge his debts to pioneers in these fields, there is a lesson here: Academic papers Fortunately, jurisdictional efforts are now underway to are like pilot projects - and Porter’s accessible tackle spending pressures and change the health elaboration and scaling-up of these ideas has greatly spending trajectory in a sustainable way. The strategies amplified their impact. and investments outlined thus far in this report are designed to support and accelerate those efforts. This chapter adds to the Panel’s recommendations by Porter, M. What is Value in Health Care. The New England Journal of Medicine. 2010 Dec; 363:2477-2481. Available from: http://www.nejm.org/doi/ focusing specifically on value-for-money in Canadian full/10.1056/NEJMp1011024 healthcare.

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In contrast, during its visit to Washington DC the Panel expenses based on a number of factors including: was impressed by the intensity of data collection and demographics, age, gender, growth projections, socio- reporting activity in the US healthcare system. This is economic status/ geography, clinical data and complexity partly attributable to a multi-payer system that requires of care. Quality Based Procedures (QBP) allocate funding detailed costing information to support billing for the full to specific procedures based on a “price X volume” continuum of health services, and a competitive approach. To date, QPB has been rolled out for 10 different environment where performance on quality and patient procedures including hip replacement, cataract surgery satisfaction both have an impact on the bottom line. From and stroke. By 2015-16, 70 percent of the provincial funding the development of Diagnostic Related Groups used for envelope provided to hospitals is expected to be allocated hospital reimbursement, to the resource-based relative via these two measures.213 value scale used to adjust physician fees, to pioneering health technology assessment, the US has been at the leading edge of innovation in the evaluation of healthcare “To ensure innovations are ultimately services and products. As outlined in earlier chapters, this incorporated into practice, healthcare expertise has led to the development of a new array of providers need to be reimbursed based on funding and delivery models – medical homes, bundled payments, and accountable care organizations – that could performance rather than volume. The current very well revolutionize US healthcare. pay system hinders efficiency, and therefore

For its part Canada has also been a leader in methodologies innovation: if new programs decrease patient and frameworks for measuring value in healthcare. Starting volumes, and therefore funding, healthcare in the early 1970s, Canadian researchers at McMaster professionals and organizations are University played a key role in the conceptualization of quality-adjusted life years, as well as in the development disinclined to adopt them.” and application of methods to measure health outcomes, and the cost-effectiveness of health interventions (i.e., Stakeholder Submission drugs, treatments, etc.).212 However, until recently, given Canada’s reliance on fee-for-service payment for medical care and global budgets for hospital services, there has Investments in case-mix costing methodologies by the been little incentive to further develop methodologies that Canadian Institute for Health Information (CIHI) are would support value-based payment strategies.158 supporting these payment reforms.214 Per recommendation 6.2, the Panel encourages CIHI to extend these efforts Governments in Canada are now beginning to move away and pave the way for bundled payment models by from global funding for hospital budgets and towards developing methods to measure multi-sectoral costs of activity-based and patient-based funding models.158 Unlike episodes of care.158 global funding, activity-based funding approaches strive to encourage greater efficiency by providing funding to While hospital funding is becoming more sophisticated, hospitals based on the number and type of activities the same cannot be said of the valuation of medical services. performed, and classifying activities using diagnosis-related Physician fee schedules contain hundreds of figures on groups to develop reimbursement levels and prices. the unit price of individual services. The absolute and Ontario, Alberta, and BC have all had some success in relative value of these services is rooted in the social history implementing activity-based and performance-based of medicine, changes in healthcare technology, and inter- funding models in an effort to improve hospital funding specialty politics. So-called “relativity adjustments” do transparency and create better incentives for high-quality, get made. For example, there have been adjustments efficient care.158 recently to fees for services such as cataract surgery where technological change has dramatically reduced the time Ontario, for example, is shifting from global budgets to required for an operation. 215 But while most medical funding based on the number of patients treated, services associations have tried to manage the fairness challenges delivered, quality of services and specific needs of implicit in relativity, the logic model for fees and total population.213 The Health Based Allocation Model estimates compensation remains opaque. In particular, there are funding at the organizational level for expected healthcare substantial differences in compensation across family

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practice, and cognitive and procedural specialties that defy shifted its energy to collective bargaining. The new battle explanation.216 As well, some types of services, such as fronts were levels of fees, obtaining coverage for costs of consultations by phone, email, or web-enabled video are practice such as malpractice insurance, and preservation simply not considered as billable services despite evidence of “extra-billing” – i.e. doctors’ latitude to charge more in other jurisdictions that virtual visits lead to reduced than the negotiated insurance rate. costs and improved patient experience. 113 This acts as a huge disincentive for the development and uptake of new As explained in Chapters 2 and 6, most high-performing approaches to care. health systems have moved away from stand-alone fee- for-service as a dominant payment model for physician With support from the proposed Healthcare Innovation services. Even in the US, the global bastion of fee-for- Fund and new Agency, jurisdictions could collaborate with service private medicine, the Obama administration has medical associations in developing a set of evidence-based set goals and a timeline to shift physician payment under benchmarks for a set of key medical services, and, in the Medicare from traditional fee-for-service to alternative interests of transparency, make this information public payment models that are tied to quality or value.219 The along with comparative analyses of medical fee schedules. goal is to tie 30 percent of fee-for-service Medicare Such work would obviously complement the broader review payments to quality or value through alternative payment of scopes of practice in relation to professional compensation, models such as accountable care organizations and bundled recommended in Chapter 6. payment by the end of 2016, and 50 percent of payments to these models by the end of 2018.219 Moving Away from Fee-for- Canadian jurisdictions have also been moving in this Service: a Long Goodbye direction. As shown in figure 8.1, close to 30 percent of physician clinical payments in 2012-13 were made through From the initial exploration of health insurance proposals alternate payment plans, up from 10 percent in 1999-2000. in the 1920s, to the adoption of universal hospital and This includes a range of models such as block funding for medical insurance in the 1950s and 1960s, to the adoption specialty groups in academic health sciences centres, of the Canada Health Act in 1984217, national and provincial blended fee-for-service and salary funding for specialists, physician associations have been at the centre of debates on-call stipends, capitation in primary care settings, about how to fund and deliver healthcare. Core principles contracts, sessional remuneration, and salary. of professionalism – the primacy of the patient-physician relationship and importance of preserving clinical autonomy The Panel welcomes this trend, but observes that movement – were routinely turned into political positions, and used is slow. Some of these payments, moreover, are simply to justify the maintenance of fee-for-service payment add-ons to core fee-for-service compensation, while others models and protection of independent private practice.218 are capitation payments to family physicians with uneven These arrangements remain largely intact 50 years later. yields as discussed earlier. The Panel reiterates the position taken in Chapter 6. In an ideal world, provinces and The adoption of fee-for-service as a primary method of territories would set timelines and targets to greatly reduce payment for physician services under Medicare was the the prevalence of physician payment models solely based least disruptive way for governments to transition physicians on fee-for-service, and align incentives around measurable from private health insurance plans to universal, publicly- quality parameters with risk-sharing. For now, the federal funded medical plans. Physicians gradually warmed to agency and Fund introduced in Chapter 4 should foster the advantages of working in a system that provided them the development of integrated funding models that are with a guaranteed income while preserving their clinical cost-effective and promote quality and continuity of care. autonomy and small business ethos. As medical services insurance was established province by province, and then continued in operation nationally, organized medicine

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Figure 8.1 Fee-for-Service vs. Alternative Payment

100

90

80

70

60

50

40

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10

Percentage of Total Clinical Payments 0 1999– 2000– 2001– 2002– 2003– 2004– 2005– 2006– 2007– 2008– 2009– 2010– 2011– 2012– 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Fee-for-Service Alternative

© Canadian Institute for Health Information, 2014

Source: Adapted from: Canadian Institute for Health Information (CIHI). Approaches for Calculating Average Clinical Payments per Physician Using Detailed Alternative Payment Data. Ottawa: CIHI; 2015 March 12. Available from: https://secure.cihi.ca/free_products/PhysicianMetrics-mar2014_EN.pdf. P.12

Pressing “Reset” on Labour is an open process, not a closed-door negotiation with Relations and Health Human organized medicine. The goal should be the creation of an environment of trust whereby senior public officials, Resources (HHR) Regulation healthcare administrators, and physicians function as partners, not adversaries, in the management of local health The collective bargaining process employed in Canada services, to the benefit of the patient an to determine physician fees and practice conditions has taxpayer. The Panel emphasizes here that it is not referring been described as a significant barrier to system change.220 to jurisdiction-wide co-management by physicians – a High-stakes discussions take place behind closed doors model that has been tried, without much success, in with little or no public transparency. Governments and Canada. Rather, as discussed in Chapter 6, the concept is medical associations both claim to speak for the public to create local partnerships. As already outlined, the Kaiser good and to have the best interests of patients at heart. Permanente model in the US is a superb example of A deal is struck that sets in motion a range of incremental successful physician leadership at the local level, resulting changes to fee schedules and practice models. If fiscal in a world-renowned non-profit healthcare system.221 conditions are tight as they have recently been, governments may be able to extract concessions or even More generally, there is significant inefficiency and impose a deal that is unpopular with the profession.210 duplication in the regulation of the healthcare workforce But chances are that nothing fundamental will change in Canada. Entry-to-practice credentials and licensure in the way the system is organized. Regional health requirements differ across jurisdictions, impeding labour authorities and institutions are then left with the mobility and the efficient deployment of health human unenviable task of integrating the physician workforce resources. Professional guilds often seek to increase study into the daily operations of a health system with minimal requirements for their profession, creating a domino effect ability to realign incentives to the advantage of patients, in disciplines and jurisdictions.220 Negotiations with unions physicians, and the institution or region. create competition across jurisdictions to attract scarce health human resources and create additional financial The Panel is convinced that a new model is urgently needed. pressure on a system that is already under fiscal duress. Governments will need a steady hand to set out the overall Chapter 6 has already made the case for more enlightened funding envelope for medical services and articulate goals regulations that will support shared care. and expectations for patient care. What the Panel envisages

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“The same budget source would encourage the There is a long history of proposals and failed attempts to right provider, providing the right care for introduce universal drug coverage in Canada dating back Canadians at the right time. In the current 50 years, when the 1964 Hall Commission recommended 50/50 cost sharing between the federal and provincial system where physicians are paid from a different governments to create a national program budget source (medical service branch or with a co-payment of $1 per prescription. 225 Three decades later, the National Forum on Health recommended first equivalent) and all other providers paid from the dollar coverage for prescription drugs in 1997, and in 2002, region health authority (or equivalent) only the Romanow Commission and the Kirby Senate Committee encourages offloading of care. The cash strapped called on the federal government to jointly fund improved coverage for catastrophic drug costs with provinces and health authority would rather contract the territories.226 services of a physician that they do not have to What happened as a result of all these recommendations? pay for out of their own budget rather than develop Nurse Practitioners or Clinical Nurse Very little nationally, as it turns out: federal commitments Specialists who could do the same role for fewer were made in the 1997 Speech from the Throne to develop a national plan to improve access to medically necessary tax payer dollars.” drugs. In the health accords of 2000, 2003 and 2004, governments acknowledged the need to improve coverage Stakeholder Submission for prescription drugs, including a nine-point National Pharmaceuticals Strategy under the 2004 Accord that costed but did not implement, a national approach to catastrophic Fortunately, there has been increased collaboration across drug coverage.227 jurisdictions on health human resources strategies in recent years. The Council of the Federation has identified the Fortunately, provinces and territories did not wait for a need to share evidence and leading practices across national consensus before moving forward with initiatives jurisdictions, recognize the inter-dependence of policies to broaden coverage for prescription drugs. Starting in from one jurisdiction to another, and integrate planning the 1970s, most jurisdictions created public drug programs activities.222 Complementary federal investments have to provide free or subsidized prescription drug coverage been made to support the development of provincial and for seniors and low-income Canadians.227 territorial health human resources strategies and facilitate the integration of internationally educated healthcare In 1997, Quebec mandated universal prescription coverage professionals.223 The new Agency and Fund would for its residents through a combination of private health unquestionably facilitate and accelerate progress in these insurance plans and a public program for those ineligible positive directions. for private coverage. The Quebec Public Prescription Drug Insurance Plan, administered by the Régie de l’assurance maladie du Québec (RAMQ) covers all Quebecers who are A Digression on “Pharmacare” not eligible for a private plan. All provincial residents must have some type of drug insurance coverage, regardless of Prescription drugs are an essential part of modern age or income. Those who are not covered through group healthcare systems. Without them, many diseases and insurance or an employee benefit plan are automatically conditions would be untreatable or would require more covered by the RAMQ’s public drug insurance plan.228 invasive interventions, and the quality of life of patients Recently, New Brunswick introduced a mandate for suffering from debilitating chronic diseases would be universal prescription drug coverage similar to the Quebec significantly worse. In the vast majority of industrialized model, albeit with very modest publicly funded coverage.229 countries, universal coverage for prescription drugs is the At present, no other Canadian province has universal norm.224 In Canada, however, universal drug coverage is coverage. Canada also has the lowest proportion of its limited to prescription drugs provided in hospitals. Drug population covered by a public drug plan of all comparator coverage is otherwise provided through a patchwork of countries, except the US. 230 public and private drug plans.

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Cost is a key reason why Canadian jurisdictions have balked In sum, the Panel strongly supports the principle that all at the idea of expanding public coverage for prescription Canadians should have access to medically necessary drugs. Spending on drugs has grown sharply over the past drugs without financial barriers. The Panel takes no 40 years, almost doubling as a share of total health position on whether this should be a single-payer or expenditures from 8.8 to 15.8 percent.5 Drugs are now the multi-payer plan involving both private and public health second largest area of healthcare spending after hospitals, insurers. However, while such strategies are debated and closely followed by physician services. In 2014, spending designed, the Panel believes that it is vital to improve on prescription drugs in Canada is estimated to have Canada’s management of drug costs, including purchasing reached more than $33.9 billion.231 Public drug plans and negotiating strategies as set out below. In the short- accounted for approximately 42 percent or $12 billion, term, recognizing that financial barriers are currently private drug plans accounted for 35 percent or $10 billion, impeding access by many Canadians to needed drugs, the and out-of-pocket spending by Canadian households Panel is recommending in Chapter 10 measures to assist represented 23 percent or $7 billion.5 Expanding public individual Canadians without drug coverage, specifically coverage would require governments to absorb a significant changes to the Income Tax Act to help Canadians cover portion of current private spending on drugs, and to increase out-of-pocket costs. taxes or levy premiums to make up the difference. And until very recently, drug costs have been the fastest growing category of health expenditures, increasing by an average Making Pharmaceuticals More of approximately 10 percent annually from 1997 to 2008.5 Affordable

Some experts have recently called for yet another push for Canada’s performance in managing the cost of drugs has national pharmacare, arguing that moving to a national been poor by international standards. Among OECD program of universal coverage with a national formulary countries, Canada has the second highest level of per capita and collective purchasing would result in lower overall spending on drugs next to the US.234 From 2000 to 2011, spending on drugs and only a marginal increase in spending drug spending in Canada increased by 160 percent, by government.232 In their view, true cost control in this compared to 126 percent in the US, 81 percent in France area can only be achieved through consolidation of buying and 44 percent in the UK.235 Drug prices in Canada are power under a national drug plan. relatively high when compared to other OECD countries. The Patented Medicine Prices Review Board (PMPRB) The Panel certainly sees merit in a more robust approach reports that of the seven countries included in its reference to collective procurement and pricing, but is concerned basket, only Germany and the US have higher patented that the current structures and incentives may not be drug prices than Canada.235 aligned appropriately.xxvii Expanding public coverage of drugs risks creating yet another silo of spending, and runs As shown in figure 8.2, Canada’s performance relative to counter to the basic principle of trying to integrate budgets these seven countries deteriorated from 2005 to 2013. This and align incentives. Indeed, one expert argued is hard to understand given the regulatory mandate of the provocatively in a recent speech about the US and Canadian PMPRB and its seven-country reference basket. Canada healthcare systems that “pharmacare without managed has also been lagging other countries with respect to care is nothing else but an open bar for big pharma.”233 generic drug prices. Canadian generic drug prices are The Panel observes in fairness that “big pharma” does not approximately 185 percent higher than the Netherlands, write prescriptions and that leaders of pharmaceutical and and significantly higher than most countries except for medical device companies have been advocating risk- Switzerland and Austraia.236 sharing arrangements for their products over the last few years. Be that as it may, concerns about cost escalation The provinces and territories have recognized this problem and lack of budgetary integration strike the Panel as valid. and have taken collective action to bring drug prices more in line with the experience of other countries. The aforementioned Pan-Canadian Pharmaceutical Alliance xxvii Other aspects of any single-payer plan will need attention. For example, the (pCPA) has been formed to address outdated policies of plan proposed by Morgan et al includes user fees or co-payments. If the level of these charges is too high, then coverage may become less comprehensive provinces and territories making individual decisions on for some portion of the population with private plans. It is also unclear the prices of brand and generic drugs. Through pCPA, whether the presumed windfall for employers would simply fall to the bottom lines of enterprises co-funding existing private coverage or be taxed away. provinces and territories may participate in joint

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Figure 8.2: Average Foreign to Canadian Price Ratios: 2005, 2013

2.5

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2 1.83

1.5 1.21 1.11 1.15 1.05 1.04 0.99 0.95 1 1 0.88 0.9 1 0.78 0.79 0.72

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0 Italy United France Canada Sweden Kingdom Germany Switzerland United States 2005 2013

Source: Adapted from: Patented Medicine Prices Review Board. Annual Report 2013. Ottawa: Patented Medicine Prices Review Board; 2014 May 30. Available from: http://www.pmprb-cepmb.gc.ca/CMFiles/Publications/Annual%20 Reports/2013/2013-Annual-Report_2013-09-15_EN.pdf. P.24

negotiations with drug companies to leverage their “We need to find efficiencies. We need to combined purchasing power with the aim of achieving purchase pharmaceuticals, supplies and lower prices, improving access to drugs, and realizing equipment on a national basis, not each greater consistency in coverage. As of December 31, 2014, these collaborative efforts have realized 49 completed joint jurisdiction buying these things on their negotiations on brand name drugs and price reductions own. This squanders the leverage we have on 14 generic drugs, resulting in over $315 million in as a nation.” savings annually.237 The Panel applauds the significant progress made by jurisdictions on this front. But it believes Public Submission there is potential for further innovation in this area supported by federal actions.

Pharmaceutical policy is an area where the federal As noted earlier, the federal government regulates the government has comparatively significant levers and prices of patented drugs through the Patented Medicine responsibilities, both as a payer and regulator of Prices Review Board (PMPRB). This unique regulatory pharmaceuticals. The Government of Canada as a payer mechanism was created in 1987 under the Patent Act to provides drug benefits through separate plans that serve protect consumers by regulating the price of patented First Nations and Inuit, Royal Canadian Mounted Police drugs to ensure they are not excessive. At that time, (RCMP) members, the Canadian Forces, veterans and price regulation of patented pharmaceuticals was federal inmates, for a total of $630 million in drug-related accepted by the brand name pharmaceutical industry in spending in 2014.5 Ontario, Quebec, BC and Alberta spend exchange for enhanced patent protection stemming from more, but this is a larger annual outlay than is made by trade agreements. Pharmaceutical manufacturers also several provinces and all three territories. Given the publicly committed to increase their investment in significant scope to achieve price reductions through research and development activities in Canada to 10 collective purchasing, the Panel urges the federal percent of the value of drug sales, a benchmark they government to coordinate efforts across federal plans and have latterly failed to reach.238 reaffirm its desire to join the pCPA as soon as possible.

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The PMPRB regulates the price of patented drugs by continue to be confidential. Pharmaceutical companies comparing the price proposed by the manufacturer to the will continue to price discriminate between countries, and price of existing drugs on the Canadian market and in up between payers within the same country. While it may to seven other countries specified in regulations. To stay not be possible to have full transparency in drug pricing within the definition of “non-excessive,” the price of new in the current international regulatory and trade breakthrough drugs cannot exceed the median of a seven environment, the Panel is strongly of view that drug prices country basket.xxviii New formulations of existing drugs or should be more transparent. The Panel therefore new drugs that do not represent a significant additional recommends that the federal government, through the therapeutic benefit over existing drugs are benchmarked Healthcare Innovation Agency of Canada, work with public against the price of comparable drugs already on the and private payers, as well as the pharmaceutical industry market. Year-over-year increases in prices are limited to and pharmacists, to improve transparency of drug prices the consumer price index. When prices are found to be and ensure that prescribers and patients have enough excessive, the manufacturer can voluntarily lower its prices information to make informed choices, and explore options and provide compensation to the PMPRB for the excess for bringing private insurers into the pCPA. revenues it earned. As a quasi-judicial body, the PMPRB also has the power to levy financial penalties.238 “Canada and the provinces have been The Panel has mixed views about the PMPRB. The data continually under pressures to approve and presented above clearly show that even with the PMPRB, fund a myriad of new drugs, diagnostic Canada’s performance in managing drug prices has been weak. To make matters worse, commitments by industry imaging, medical devices and surgical to increase investment in research and development have interventions – and these pressures have been not been met.235 As collective purchasing of drugs expands across public plans, and eventually to private plans, the growing inexorably. Many of these demands PMPRB’s role may be further diminished. for new funding are highly valuable and worth the investment. But there are also many However, as long as Canada does not have universal coverage of prescription drugs through a network of public innovations which are simply not worthwhile. and/or private plans, the PMPRB should continue to serve In the private sector, there is a constant as a backstop against high drug prices for consumers who are not covered by group purchasing arrangements. This weeding that separates really beneficial from will become increasingly important as new, expensive poor quality innovations – whether in mobile “niche” drugs and biologics arrive on the market with the phones or new cars.” promise of curing or treating rare diseases. The Panel therefore recommends that the federal government review Stakeholder Submission and strengthen the PMPRB, paying particular attention to the choice of reference countries, and how PMPRB arrives at a benchmark price, so as to ensure that the Board will provide more effective consumer protection against high Towards more Efficient Regulation patented drug prices. of Healthcare Products

More generally, the Panel observes a disconcerting lack of transparency in drug pricing. Confidential price listing Throughout the Panel’s consultations, participants agreements between public payers and pharmaceutical expressed concerns about the inefficiency and duplication companies are now the norm around the world.239 Collective of regulatory processes governing healthcare products and purchasing arrangements will consolidate purchasing services. Innovators are frustrated by a multi-tiered system power and may lead to lower effective drug prices that for regulatory approval and fragmented purchasing, forcing benefit taxpayers. However, even under the pCPA, them to seek adoption by individual healthcare institutions negotiated rebates off the official list price of drugs will and providers. Payers are in a fiscal straightjacket and can barely keep up with the flow of products in the industry xxviii France, Italy, Germany, Sweden, Switzerland, UK, and the US. pipeline, only some of which represent significant value-

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added benefits for the healthcare system. (i.e., breakthrough “Medical device technologies are a long term therapies, new diagnostics). Patients do not really have a investment, and investors are often hesitant to voice in the process, but they are the ones with the most fund small and medium-sized medical device at stake when health-enhancing therapies are not available to them or when scarce public resources are squandered companies because of lengthy regulatory on products with no health benefit. hurdles and uncertainty of the affordability of

Measures to integrate services and create shared budgets, development in Canada. It is for this reason that recommended in Chapter 6, may address some of the leadership is sorely needed from government.” frustrations of innovators industry stakeholders seeking greater clarity about purchasing decisions. However, to Stakeholder Submission address the regulatory concerns, the Panel recommends that federal, provincial and territorial governments embrace the following directions: The federal government has a well-established role in regulating the safety and efficacy of drugs. This is a 1. Adopt a life-cycle approach to product regulation that necessary role, but it is no longer sufficient. The emerging builds on pre-market evaluations and uses information reality of pharmaceuticals is that decisions about their use from real-world use need to be made on a continuing basis, throughout the product’s lifecycle, and by many different actors. Information 2. Where possible, harmonize requirements with, and needs to be collected and shared to support this process. leverage the capacity of foreign regulators such as the US Food and Drug Administration and the European As part of new federal initiatives to strengthen drug safety, Medicines Agency Health Canada is updating its user fees to better allocate its resources to reflect the growing importance of post- 3. Develop and use common metrics for evaluation and market work.241 Through regulatory cooperation initiatives avoid duplication of product assessments across with Australia and initiatives focused on generic drugs, Canadian jurisdictions Health Canada is expanding the use of approvals of other trusted regulatory authorities to meet the market access 4. Streamline regulatory processes to expedite adoption requirements in Canada, particularly for more straightforward of value-added innovations reviews (i.e., generic drug review, low risk small molecule drugs).242 This should allow Health Canada to focus scarce 5. Strengthen communication among all players to enable resources on more post-market work, complex reviews, more effective procurement by the healthcare system and reviews of more benefit to the healthcare system.

Stakeholders also expressed concerns that Canada is Building on these initiatives, Health Canada should actively lagging in its adoption of international regulatory seek to improve dialogue and communication with other approaches that facilitate the adoption of incremental parts of the healthcare system, while making adjustments innovations for medical devices, including the “substantial to its current policies and processes. Departmental officials equivalence” (SE) provision under the US Food and Drug should establish regular bilateral meetings with provincial Administration 510(k).240 This SE process differs from a and territorial officials responsible for drug plans. Health pre-market approval process as regulators are only partially Canada should adjust its fee schedule and/or prioritization assessing the safety and efficacy of a device based on its of product reviews to privilege drugs that are a priority for SE to a product already on the market. Consideration is the healthcare system. It should share information with needed as to a similar approach in Canada, particularly in others, such as informing the Canadian Agency for Drugs light of the fast life-cycle of medical devices. and Technologies in Health (CADTH) and provincial/ territorial officials when a drug is under review. It should also develop guidance on the interchangeability or similarity of biologics and subsequent-entry biologics, to advance Canadian adoption of this class of drugs, and provide drug plans with greater leverage to negotiate better prices.

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Furthermore, the federal government should use its role As one example of the type of work that might be in approving clinical trials to encourage the pharmaceutical supported by an Innovation Fund and the new Agency, industry to conduct studies for the benefit of payers, not Lean techniques could be scaled up to other regions and just for Health Canada’s market approval. The objective jurisdictions in collaboration with leaders and practitioners would be to support organizations like CADTH, the pCPA, who have already applied them successfully in some and provincial and territorial drug plans in getting the parts of Canada. studies and information they need, as has been proposed for the implementation of the orphan drug framework. is a new campaign to help This could be done by providing advice to pharmaceutical physicians and patients engage in conversations about manufacturers on trials they ought to perform, or it could unnecessary tests, treatments and procedures, and to be turned into a regulatory requirement. support smart and effective choices to ensure high-quality care. The movement, spear-headed by Dr. Wendy Levinson Finally, recognizing that there are a variety of organizations from the University of Toronto, began in the US and has and players in this area, and that an increasing proportion now been introduced in Canada with support from the of drug-related information will be obtained post-market, Ontario Ministry of Health and Long-Term Care.244 the federal government should improve and align the work Canadian national specialty societies participating in the of federal or federally-funded agencies, including Health campaign, representing a broad spectrum of physicians, Canada, CADTH, the PMPRB, CIHI and the Drug Safety have been asked to develop lists of “Things Physicians and Effectiveness Network (DSEN). and Patients Should Question”. These lists identify tests, treatments or procedures commonly used in each specialty, but that are not supported by evidence and/or could expose Fostering Culture Change to patients to unnecessary harm. For example, in the area of Reduce Waste and Inefficiency primary care, family physicians have proposed the following: • Avoid imaging for lower-back pain unless red flags The Panel would be remiss not to highlight two promising are present; areas of work that seek to change system culture to improve • Do not use antibiotics for upper respiratory infections value in healthcare. that are likely viral in origin, such as influenza-like illness, or self-limiting, such as sinus infections of less First, several provinces, including Saskatchewan, Manitoba, than seven days of duration; BC, Ontario and Quebec, have integrated Lean techniques in their reform efforts. In its simplest form, Lean is a system • Do not order screening chest X-rays and that organizations can use to eliminate waste and meet the electrocardiograms for asymptomatic or low risk demands of customers through continuous improvements outpatients; to processes. Originally popularized in North America through the Toyota Production System in the manufacturing • Do not screen women with Pap smears if under 21 sector, Lean is now applied to healthcare, where it has the years of age or over 69 years of age; potential to reduce wait times and length-of-stay, create • Do not do annual screening blood tests unless directly system efficiencies, and improve quality of care.243 indicated by the risk profile of the patient.245 Saskatchewan has identified Lean as the foundation for the province’s quality improvement efforts, and hundreds The Panel salutes this initiative as an innovative physician- of projects are currently underway. For example, clinical led and patient-centred approach that has the potential practice redesign is a key component of the Saskatchewan to shift healthcare away from a culture of consumption to Surgical Initiative and includes a set of tools and a focus on appropriateness and quality of care. The Panel methodologies designed to improve access to care, improve encourages governments to support the implementation office efficiencies and improve communication between of this initiative in all jurisdictions and to carefully evaluate office settings and healthcare providers.187 Within hospitals, its impact. Lean activities have helped to reduce waste in front-line staff. Lastly, major capital projects have also incorporated Lean principles in facility design to improve processes.243

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Recommendations to the 8 .4 Review the Patented Medicines Federal Government Pricing Review Board to assess its relevance and strengthen its role 8 1. Coordinate and integrate in protecting consumers against existing federal drug plans and reaffirm high drug prices in an era of federal desire to join the Council enhanced collective procurement and of the Federation’s pan-Canadian coordinated national pricing . Pharmaceutical Alliance . 8 .5 Through the new Healthcare 8 .2 Through Health Canada, expand Innovation Agency of Canada, the Government of Canada’s approach with federal investments from the to regulating drugs beyond drug safety Healthcare Innovation Fund: to better support system decision- making on the cost- effectiveness of • Offer to serve as the secretariat for a pan-Canadian Drug Purchasing Alliance. drugs . • Pursue support for the implementation of the Choosing • Consider therapeutic benefits in addition to safety Wisely Canada initiative in all jurisdictions and carefully benefits in its approval process; evaluate its impact.

• Require drug manufacturers to conduct comparative • Work with public and private payers, as well as the effectiveness studies; pharmaceutical industry and pharmacists, to explore options to that would improve transparency about • Adjust cost recovery for drug approvals to privilege drug prices, and ensure that prescribers and patients high impact and value drugs over “me too” drugs; and, have enough information to make informed choices.

• Provide advice to system decision-makers on the • Collaborate with provincial, territorial, and private interchangeability or similarity of biologics and drug plans on strategies to extend the reach of collective subsequent entry biologics. purchasing strategies to all Canadians including the potential for bringing private insurers into the pCPA.

8 .3 Through Health Canada, accelerate work on transparency in 8 .6 Re-orient the Canadian Agency its regulatory processes . This should for Drugs and Technologies in Health include providing advance notice as (CADTH) to better support innovation to which products it has under review by providing real-time advice to to permit decision-makers to plan decision-makers on drugs and medical their budgets accordingly . It also devices, and support CADTH to:

must include making public all data • Build up its expertise and increase its turnover related on the safety and effectiveness of to its decisions on technologies to reflect their rapid drugs and devices . life-cycle, including partnering with provincial initiatives that seek to align the pre-market and post- market assessment processes.

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• Benchmark its turnaround against similar health technology assessment agencies internationally, which play a central role in providing rapid-cycle guidance on the cost-effectiveness of drugs and technologies.

• Assume the responsibilities of the Drug Safety and Effectiveness Network (DSEN; currently located in CIHR), which supports research into the post-market safety and effectiveness of drugs, given the natural affinity of this work with CADTH’s mandate.

• Examine and make recommendations related to practices that are becoming obsolescent, such as those that no longer provide optimal patient outcomes.

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96 | CHAPTER 8 — IMPROVING VALUE IN HEALTHCARE Chapter 9 Healthcare and Economic Prosperity

“Entrepreneurs challenge the status quo, whereas incumbent institutions in health are designed to largely maintain the status quo. A vibrant community of young health start-ups that are problem solving at the front lines is critical to support healthcare institutions.”

Public Submission

“In order to succeed, innovators need access to national and international markets. Doing so allows innovators to scale their solutions, provide a reasonable return on investment, and generate profits that can be reinvested in new research and development. The Canadian marketplace, with 14 government jurisdictions each setting their own requirements, makes it difficult for innovators to succeed.”

Stakeholder Submission UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Healthcare and Economic Prosperity

The costs of healthcare in Canada understandably receive “Based on stock market values at the end of considerable attention. On occasion, however, we overlook 2014, the collective value of a mere four US the economic benefits that this sector provides to our society. According to the Conference Board of Canada, in 2011 the [biotech] biggies – Gilead, Amgen, Celgene healthcare sector supported “2.1 million jobs – directly and Biogen Idec – was larger than all of throughout the sector and indirectly through the supply Canada’s Big Six banks plus the insurers Sun chain.”246 The Conference Board of Canada estimated in 2013 that, “for every dollar spent on healthcare, the various Life and Manulife put together.” levels of government collect 21.7 cents in taxes.”246 Other benefits were cited by the Board in 2013: “because healthcare Eric Reguly services touch the life of every Canadian, the sector plays

a key role in decreasing employee absence due to illness, Reguly E. Why is Canada’s life sciences sector flatlining? Globe and Mail. 2014Apr23. stress, and disability which bring significant economic Available from: http://www.theglobeandmail.com/report-on-business/rob- burden to Canada. Put simply, healthier workers are more magazine/why-is--life-sciences-sector-flatlining/article24030375/) productive workers.”247 In this regard, major corporations in Canada are increasingly recognizing that the health and For example, in 2012, Canada’s medical devices market wellness of employees is a key contributor to employee was estimated at $6.4 billion and accounted for about productivity, and are developing wellness programs to both two percent of the global market, valued at about $327 keep their employees healthy and reduce the cost of their billion.248 The medical device industry – not taking into health insurance plans.xxix account medical imaging and assistive devices - employed over 35,000 people in close to 1,500 corporate facilities, This chapter extends the analysis in Chapter 8 by taking with a large portion of the industry being small and mid- a wider view of how segments of the investor-owned sized companies.249 In 2014, the manufacturing portion healthcare sector can contribute to Canada’s prosperity. of pharmaceutical sector employed over 26,000 people Drawing on selected international comparisons, it pays and had an estimated value of $7.5 billion.250 particular attention to the environment for healthcare business that has been created through fragmented Countries such as Denmark and the UKxxx have recognized purchasing in Canadian healthcare systems, and revisits the dual potential of this industry. For example, the issues of duplication and delay in approvals elucidated approximately 40 percent of the world’s hearing aids are in the preceding chapter. being developed and manufactured in Denmark.251 Its Medicon Valley hub, which spans Eastern Denmark and Canada’s Healthcare Products South-Western Sweden, is one of Europe’s largest life and Services Industry science clusters, employing more than 40,000 in the life science sector,251and accounting for 20 percent of the total The healthcare products and services industry has the GDP of Denmark and Sweden combined.252 Denmark is potential to create prosperity while helping Canada’s also home to a highly competitive pharmaceutical industry, healthcare systems to deliver higher quality or more cost- with pharmaceuticals being one of Denmark’s largest effective care, and Canadian patients to enjoy longer and export items at close to 11 percent of total Danish exports.251 better lives. Canada stands in stark contrast. In the light of commissioned

xxix While outside the scope of this report, the Panel heard comments from industry research and discussions over the last year with a range representatives about the need for Canada’s largest employer – the Government of stakeholders, the Panel has concluded that Canada is of Canada – to adopt similar approaches and to become a role model for other employers in Canada. The Panel is encouraged by the federal government’s recent decision to create a Joint Task Force to examine ways to improve the xxx Germany is another example of a country that is deriving significant benefit psychological health and safety in the federal workplace, including “reviewing from its medical devices industry. According to a study in 2011 conducted by practices from other jurisdictions, and reviewing the National Standard of Canada the Federal Ministry of Economics, “innovations in the healthcare sector and for Psychological Health and Safety in the Workplace and identifying how its progress in medical technology resulted in savings in the amount of 22 billion objectives shall best be achieved within the Public Service.” Treasury Board of euros for the German economy in the last few years.” MedInsight. New study Canada Secretariat [Internet]. Ottawa: Government of Canada; 2015. Available on innovation impulses by the Ministry of Economics. German Healthcare from: http://news.gc.ca/web/article-en.do?nid=956409 Market & Advanced Medical Technology. 2011.

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Figure 9.1 Health (Drugs and Devices); Denmark’s Largest Export, 2013

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Billion DKK 30

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0 1991 2011 1997 1992 1995 1993 2012 1998 1989 2013 1999 1996 1994 1990 2010 2001 2007 2002 2005 2003 2008 2009 2006 2004 2000

Medicinal and Pharmaceutical Products General Industrial Machinery and Equipment Petroleum, Petroleum Products and Related Materials Meat and Meat Preparations

Hentze J. Presentation to the Advisory Panel on Healthcare Innovation: Leveraging Healthcare For Economic Growth: Denmark’s Story. Toronto: Royal Danish Consulate General; 2015.

failing to leverage this industry as a driver of economic Canada has many of the fundamentals in place. These growth. As one indicator, Canada has an active market include a favourable tax environment, competitive levels for medical devices but imports account for about 80 of support for research and development, world class percent of purchases.248 Likewise, notwithstanding strong healthcare and post-secondary institutions, leading sales, pharmaceutical manufacturing has been declining academic researchers and healthcare professionals, and over the years. In 2013, pharmaceutical exports amounted the presence of many prominent healthcare companies. to $5.6 billion, while imports were valued at $13.7 billion.250 From its consultations, the Panel was also left in no doubt Today, Novo Nordisk, a Danish company, is the world that Canada is not short of good ideas and new inventions leader in the production of insulin – a Canadian invention.253 that could be turned into market-ready innovations. The question, then, is whether we will continue to let others develop and market new products and services to us or “Technology-enabled community-based care whether we can create the winning conditions for home- solutions can be the breakthrough our system grown industries and innovations to succeed here and around the world. urgently needs to reduce the growth rate of healthcare costs, while also raising productivity and improving health outcomes.” Key Barriers to Harnessing our Economic Potential Stakeholder Submission

Consider an inventor turned entrepreneur who has just developed a new healthcare product. While she is On the positive side, Canada has unrealized potential to convinced that once adopted, the system will be grateful punch above its weight in the development, for the lives and money her product will save, she has no commercialization, adoption and export of innovative idea how to get it into the hands of the end-user. healthcare products and services. The global nature of Unfortunately, there is no map to point her in the right demand also means that Canadian products and services direction. What she instead encounters on her uncharted of high value can jump into larger healthcare markets. journey is a tangle of decision-makers and conflicting

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criteria to get her product approved for safety, evaluated Specific factors cited by stakeholders were: a lack of for cost-effectiveness, assessed for potential purchase and government-industry partnership, a highly fragmented re-assessed for reimbursement. None of those processes market, and duplication and lack of harmonization in the are connected or aligned. In the absence of an integrated regulatory environment – both domestically and pathway to procurement and adoption, she must go internationally. These will be reviewed in turn. hospital to hospital or even physician to physician to pitch her product, with her success being linked more to who she knows than the value of the product. Her money is Need for Government-Industry running out, as is her passion for the product she feels Partnership will save the lives of many patients. During its consultations, the Panel heard that elsewhere While the troubles of our fictitious entrepreneur are meant in the world, countries have a partnership ethos: they are to be illustrative, they represent an authentic roll-up of looking to proactively engage with industry for development what the Panel heard from many different business leaders of context-appropriate healthcare solutions. Canadian and innovators. representatives from small and medium-sized enterprises, as well as larger companies, painted a different picture in Research commissioned by the Panel confirmed these Canada. They voiced concerns that industry was seldom concerns (see figure 9.2): While governments of all seen as a partner in solving persistent healthcare problems. jurisdictions were enthusiastic in principle about innovation In other industries, governments have found a way to work in the healthcare system, their support was focused with industry that supports the life cycle and broader upstream. Funding flowed primarily for research, economic benefits of publicly-funded procurement while secondarily for development, and much less so to support leveraging the ability of industry to create new solutions. the adoption of new products, processes and services, In the healthcare sector, collaboration between the public partnership development and diffusion or scaling-up. The and private sector to develop solutions and needed products Ivey International Centre for Health Innovation concluded remains underdeveloped – despite the fact that the federal, that Canada performs poorly in these latter areas.254 provincial and territorial governments all invest in health- related research and development.

Figure 9.2: Innovation Adoption Journey

Diffusion, Scaling-up & Widespread Adoption

Health System Needs & Priorities Implementation & Early Adoption Innovation Journey Partnership Capacity Building

Pilot Testing Commercialization Research & Development

Adapted from Ivey International Centre for Health Innovation. Advisory Panel on Healthcare Innovation Commissioned Research: An Overview of Canada’s Health Innovation Architecture. London; c.2015.

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“Governments are big players in Canada, very that collaboration on these terms among industry, big players in the healthcare system and with a government, providers and other stakeholders should be few exceptions there are not many leaders encouraged. interested in government-industry collaboration. We do not have a lot of people “We do not have the economic or the business bridging that gap.” case conversation. These one‑offs of virtual care and fee schedules that are all new, small, “The problem for the provinces is that they all changes, are not enough. It really warrants, I have budget pressures. So it is all heads down think, a workforce conversation.” trying to balance your budget.” Participant at Industry/ Government Roundtable Participants at Industry/Government Roundtable

“Despite a rapidly growing list of mHealth Many stakeholders also pointed to the rigidity of adoption and reimbursement policies across Canada’s healthcare solutions in existence today, payment models systems. For example, virtual medicine is having a tangible do not adequately recognize mobile health and positive impact on the quality and cost-effectiveness solutions as a reimbursable service. of ambulatory care. However, uptake in Canada has been piecemeal and we have failed to successfully leverage this Reimbursement models for healthcare innovation to the extent other countries have done. In part, professionals must be aligned to account for inflexible processes for adjusting physician remuneration for new ways of delivering care have discouraged use of new outcomes-based models of care delivery these products and approaches. Furthermore, as outlined that leverage the use of mobile technology.” in Chapter 6, misaligned incentives and weak integration are larger problems that continue to constrain the adoption Stakeholder Submission of this and other innovations.

The overall result is that dialogue between the health sector and industry on system needs and priorities is simply not Fragmentation Within the Canadian taking place. In a better world, early and open discussions Market to identify the critical problems of Canadian healthcare could be used by the private sector to create products and Canada is a small market on the international stage, made services that meet domestic needs – and that might well smaller still by a systemic lack of collaboration and be saleable globally after being adopted here.xxxi coordination of procurement. Multiple jurisdictions, with numerous purchasing processes at the regional and Industry commentators signalled strongly to the Panel that institutional level, create multiple hurdles for any company their sector is prepared to meet the high standards of safety seeking uptake of its innovative goods or services. The and efficacy that Canadians expect from health-related situation at times seems Kafkaesque: for example, the interventions, to conduct research in Canada that meets Panel heard about Canadian technologies being sold to ethical and scientific standards, and to compete for business sophisticated international markets which were ignored on the basis of value for money. In return, they expect that by purchasers in the cities and provinces where the products Canadian governments will recognize that industry can were developed. play a valuable role in developing tools to improve the quality and cost-effectiveness of care. The Panel believes

xxxi An important theme that emerged from the Advisory Panel’s Industry/ Government Roundtable.

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“There is no home market…it seems to me and territorial drug plans (except Quebec) the product that we are shooting ourselves in the foot.” must undergo a clinical and cost-effectiveness assessment by the Canadian Agency for Drugs and “It is ridiculous that we cannot get our act Technologies (CADTH).xxxii Each of these publicly funded drug plans and cancer agencies (again except together. We call ourselves a single payer agent Quebec) considers the recommendations of the country. We are not a single payer. We have more CADTH review along with local factors and budgets, payers than anywhere else I go to. And it’s about before making a decision on coverage. In 2012-13, these plans followed the CADTH recommendations time we got it.” in over 90 percent of cases.

“You have to have a bit of a screw loose to • Each private payer (e.g. private insurance companies, innovate health in Canada. There are not many employer-sponsored drug plans etc.) follows its own process. Some may cover any drugs approved for of us, I do not think. I have got an all Canadian sale by Health Canada, while others follow decisions team. We are all motivated by Canada. But I made by public plans or create their own formularies. am looking straight at the US because I know Private drug plans do not collaborate with each other or the public sector in terms of sharing data and exactly how to get it done there. And I have no information or on common issues, such as joint idea how to get it done here. And so I just do purchasing of drugs. not even look here anymore. This is an awful • For the drugs provided in hospital, each hospital or shame to take all this Canadian trained talent, hospital region has traditionally developed its own all this investment into our start-up but I’m formulary. This has been justified over time by the fact that not all hospitals treat the same types of patients. not even looking at this country because I have no clue who the buyer is.” • In terms of procurement, Group Purchasing Organizations negotiate contracts with drug Participants at Industry/ manufacturers in order to realize cost savings for Government Roundtable regional health authorities and hospitals. As discussed in Chapter 8, provinces and territories created the pan-Canadian Pharmaceutical Alliance (pCPA) to jointly negotiate the price of publicly Fragmentation Meets Duplication and funded generic and brand name drugs. At this time, Lack of Harmonization: The Domestic the pCPA does not negotiate preferred drug pricing for drug expenditures covered by public hospitals or Environment by private employee drug plans. The Panel has already referred to the wisdom of aligning private plans with The process for getting a new drug into the Canadian pCPA; it sees no reason why similar group market is long and complicated.255 procurement cannot be done routinely with and by publicly-funded hospitals. • It first must get approved for the market by the federal government. Health Canada is responsible for assessing drug safety, efficacy and quality and for post market monitoring of drug safety. Many stakeholders commented on the length and lack of transparency of Health Canada’s review processes.

• Once Health Canada grants market approval, the product can be prescribed but may or may not be xxxii This is done through the Common Drug Review and for cancer drugs, through reimbursed by drug plans. For the federal, provincial the Pan-Canadian Oncology Drug Review.

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“There is no accountability for innovation • The final decision on whether to fund a given adoption and spread; nor are there consequences product is made in most cases by individual for not embracing, rapidly adopting, and rapidly hospitals or regional health authorities. These decision-makers may or may not be required to diffusing proven innovations. This is actually follow the recommendations of health technology highly irresponsible given the volume of assessment bodies.

inventions and pilots that are financed by the • After the reimbursement decisions are made, group public purse in Canada that never see the light of purchasing arrangements often kick inxxxv for day in terms of full value capture.” negotiations with medical device suppliers. Different group purchasing organizations operate Stakeholder Submission across the country with varying approaches, posing another hurdle for suppliers, particularly smaller- scale companies.

While the picture for drugs in Canada may seem complicated, • Because of these fragmented processes, decision- the situation for medical devices is even more so:256 making does not consistently take into account the results of formal health technology assessments or • Like drugs, medical devices are first approved for the potential savings a new technology could bring to market by Health Canada, which reviews the product the healthcare system. for safety, quality and effectiveness. This can be a lengthy process, depending on the class of the medical • Furthermore, despite some alignment of procurement device.xxxiii Like the process for drug approval, principles (such as the Agreement on Internal Trade257 stakeholders complain about a lack of transparency. and New West Partnership Trade Agreement258), the fact remains that companies must go province by • Once approved for market, however, there is no central province (if not hospital by hospital) to seek uptake process for health technology assessments.xxxiv BC, of their products. Alberta, Ontario, Quebec, and Newfoundland have developed their own provincial processes. On this last point, the Panel heard that our disjointed system is leading multinational enterprises, especially in • CADTH undertakes health technology assessments the device sector, to see Canada as an unfavourable place deemed to be of national interest at the request of for investment or for field-testing promising innovations. governments. This service is particularly helpful for As one representative of a multinational company said to those provinces which do not have their own capacity. the Panel: “As an international company, we are just fighting However, CADTH can only review a fraction of new to get Canada on the map in terms of getting innovation medical devices coming on the market. It has been dollars to bring into Canada…Once I make the argument criticized for slow reviews – an issue given the short on a global scale that Canada is important for my company life-cycle for these products relative to drugs. to invest in, then I have to go to, well, what province? …. It does not make sense.”

xxxiii Medical devices are regulated under the Food and Drugs Act as a Class I, II, III or IV, with Class I representing devices that present the lowest risk and Class IV the highest. Class I devices are exempt from licensing and do not need to obtain Health Canada approval to market. Class II devices require that applicants assert the safety and efficacy of their device without having to submit evidence to support this conclusion. Class III and IV devices require more documentation and provision of evidence proving the safety and effectiveness of their device. xxxiv CADTH defines health technology assessments as “evaluations of clinical effectiveness, cost-effectiveness, and the ethical, legal, and social implications of health technologies on patient health and the healthcare system.” (CADTH [Internet]. About Health Technology Assessments. Ottawa, Canadian Agency for Drugs and Technologies in Health; 2015. Available from: https://www. cadth.ca/hta) xxxv This is a common practice in most provinces.

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“Generally, all drugs that are approved by the also spoke forcefully for the need for a roadmap that will FDA will eventually have applications help steer product developers in the right direction, and submitted for review in Canada. Canada has streamlining of current processes. A study by the Ivey International Centre for Health Innovation echoes these one tenth the population of the US and our concerns. It concluded that in order for “Canada’s health regulatory budget is less than one tenth that of system to reap the benefits of new innovative technologies, procurement processes must consider quality of patient the FDA, but Health Canada still needs to care and long-term system-level efficiency as key indicators review the same number of applications. for the procurement of innovative medical devices.”259 There needs to be some collaboration.” In those respects, an international best practice may be Stakeholder Submission the Capital Region of Denmark’s (Copenhagen) procurement office, which “structures tenders to include ‘mandatory’ features, while allowing competition on ‘voluntary’ (value-added features). Approximately equal The lack of a national review process has also led to weight is given to price and non-price factors.”260 allegations of regulatory capture by stakeholders who may not be making objective decisions.xxxvi In this respect, the More broadly, the European Union has introduced Panel is aware that physicians and administrators may competitive dialogue as an innovative procurement practice. have relationships with particular companies, and that While procurement rules have generally discouraged close physicians on occasion are involved with the invention of collaboration between healthcare buyers and suppliers, local technologies. It cannot judge whether these factors competitive dialogue allows bidders to develop alternative have unfairly skewed purchasing at the local level. proposes in response to a client’s outline requirements. The goal is to increase value in terms of quality and responsiveness to health system needs while maintaining “In terms of entry to market…when you run a competition in the bidding process.261 company that has over 80,000 products, you are Looking domestically, Ontario’s MaRS Excellence in looking at a rather complex process in terms of Clinical Innovation Technology Evaluation (EXCITE) getting licences in Canada. …We just launched a program exemplifies the same approach. EXCITE facilitates brand new total knee system… which has a dialogue among innovators and payers or end-users. The goal is to identify upfront whether innovations are of thousands of pieces. But if one of the instruments potential value to a given healthcare system and relevant is not licensed, then we are looking at months in to the payer’s and end-users’ priorities.262 delays of actually bringing that product to market The result is sharing of data to support regulatory and in Canada….We could certainly drive towards a procurement/ reimbursement decision-making through quicker model.” a streamlined, single, harmonized pre-market process. 262

Participant at Industry/ In sum, clearing this regulatory and purchasing thicket depends Government Roundtable meaningfully on better collaboration among the federal, provincial and territorial governments. One stakeholder remarked tartly to the Panel: “The trouble that the feds have is to establish positive enough relationships with the provinces Stakeholders were particularly concerned that group so that federal levers can be used.” In the foregoing case, the purchasing organizations place too much emphasis on Panel would observe the levers are best constructed and used purchase price alone, and not enough on overall value to on a multi-jurisdictional rather than federal basis. But the point patients and the healthcare system. Industry representatives about collaboration holds. The Panel believes that new models for these relationships -- coalitions of the willing that collaborate to innovate – may change dysfunctional aspects of the current xxxvi This theme surfaced strongly in the Advisory Panel’s Industry/Government Collaboration Roundtable. federal/provincial/territorial dynamics.

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Duplication and Lack of “The federal government can say: hey, look, not Harmonization Internationally only do we need consistency from province to province on certain things that just intuitively Similar to the fragmentation of Canada’s internal market, the Panel also learned about the misalignment of its make sense... but that even within a province, we regulatory functions with its international counterparts. have got to get better at integrating where we are While the safety of products should always be paramount and sober second thoughts from domestic regulators have going to spend money and where we are going to a place, the Panel is persuaded of the need for Canada to see the benefits.” ensure that there is regulatory harmonization with other Participant at Industry/ global regulatory bodies like the US Food and Drug Administration (FDA), or the European Union. Government Roundtable

The Panel applauds steps that the federal government is already taking in this regard. To elaborate: in 2011, Canada and the US established the Canada-US Regulatory Key Directions for the Future Cooperation Council to improve alignment between the two countries’ regulatory approaches, including in health. Looking beyond Canada for a moment, it is clear that there Regulators benefit from sharing expertise, more efficient are excellent examples of countries that support the decision-making and the development of joint approaches healthcare needs of their population through strong to common risks. The private sector benefits from not publicly insured services while also ensuring that they have having to meet duplicative regulatory requirements. access to the latest safe and effective drugs and devices. Consumers benefit from improved safety, timely access to innovations and possibly lower prices.263 At the outset of this chapter, Denmark was identified as a leader. Denmark actively shapes policies to support In 2014, under the Joint Forward Plan, Health Canada and the development of a healthcare products industry that the US Food and Drug Administration agreed to work can compete globally, supports domestic small and together to resolve pre- and post-market regulatory issues medium sized enterprises in the healthcare field, and in a range of areas including pharmaceutical and biologic actively facilitates the commercialization of key products, as well as medical devices.263 Given the significant healthcare innovations.264 Denmark has also launched risk that Canada will be left behind as industry steers clear a “single point of entry” in each Danish region for of what is widely perceived to be a fragmented and duplicative companies conducting clinical trials with the aim of regulatory and reimbursement environment, the Panel making patient recruitment faster and facilitating better encourages acceleration of these collaborative efforts. communication between hospitals and industry.251 Finally, in its network of Innovation Centres and Trade Councils around the world, Denmark places a priority “Denmark should be among the most attractive on ensuring that Danish companies can break into and countries in the world for developing, testing and navigate foreign healthcare markets. manufacturing health and care solutions based on The UK has also recognized the potential of the private strong research, fast implementation of innovative sector to develop new tools and processes that will improve new technology, good conditions for public- the quality and cost-effectiveness of care. It is actively taking steps to remove barriers and accelerate the adoption private collaboration and a well-functioning, of innovations by the National Health Service (NHS). It development-oriented home market.” recently created the Innovative Medicines and Medical Technology Review to examine regulatory and Joan Hentze, quoting from Denmark at Work: Plan reimbursement systems and other factors that impact the for Growth in Health and Care Solutions speed of the adoption of innovations to patients. The aim “is to ensure that the UK is the fastest place in the world for the design, development and widespread adoption of Hentze J [Presentation]. Leveraging Healthcare For Economic Growth: Denmark’s Story. Toronto: Royal Danish Consulate General; 2015. medical innovations. This will help stimulate new

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investment, jobs and economic growth to support a Recommendations to the stronger NHS.”265 Federal Government

In addition, the NHS has developed several programs to address issues around adoption and to further strengthen 9 1. Create a Healthcare Innovation the role of healthcare as an economic driver: Accelerator Office, housed in the

• The 2014 NHS Five Year Forward View proposed the Healthcare Innovation Agency of creation of “test beds,” which will offer a site to test Canada, to: new technologies’ real-world impact in the healthcare system (i.e., in terms of improved care and value-for- • Work with federal, provincial and territorial ministries money). There are currently five test beds to which of health and other stakeholders to accelerate the interested domestic and international innovators are adoption of potentially disruptive technologies that being invited to apply. Only the most promising show early promise of value for money to the system innovations will be selected based on their ability to and benefit for patients. provide the greatest potential value to patients as well as taxpayers.266 οο This would include interacting with companies in pre-market processes to reduce post-market • Innovation Connect is another NHS program which redundancy (viz. European Union practices, or the is designed to help fast-track emerging healthcare MaRS EXCITE model) innovations, with a team that will support innovators and help them to navigate and overcome barriers on their route.267 9 .2 Through Health Canada, accelerate regulatory harmonization • The NHS Innovation Accelerator (NIA) programme, mentioned in Chapter 2, “aims to give patients more and convergence, while ensuring equitable access to cutting edge, high impact products, that safety remains paramount, processes and technologies, by focusing on the to streamline domestic processes conditions and cultural change needed to enable the NHS to adopt innovations that matter to patients, at with international standards in scale and pace.”268 recognition of the global nature of the

In sum, we have an opportunity in Canada to follow in pharmaceutical and medical devices the footsteps of Denmark, the UK and other nations in industry . Priorities should include: creating an environment that leverages the economic potential of the healthcare sector. The Panel recognizes • Providing advice to small and medium-sized enterprises that there will be points of friction. The ethos of our on how to navigate the healthcare system, including universal healthcare systems and those working in them developing a roadmap of processes and supports. will sometimes be at odds with the bottom-line goals of industry partners. Inter-jurisdictional collaboration and • Partnering with the US Food and Drug Administration harmonization may be challenging. However, the Panel in order to reduce redundancy without compromising believes that the current situation is not only damaging to Canada’s high standards around the safety of products, Canada’s long-term economic standing, but also undercuts further to the discussion in chapter 8. sustainability and excellence in our healthcare systems. Federal leadership through a single organization that is mandated to drive opportunities for partnership of mutual benefit to industry and Canadians is critical to catalyzing needed change in this area.

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9 .3 Through Health Canada, in collaboration with Industry Canada, develop a whole-of-government federal strategy to support the growth of Canadian commercial enterprises in the healthcare field .

• The strategy should consider the needs of Canadian companies in the generation, domestic commercialization, and export of products and services, as well as in attracting foreign investment to the health field.

• Elements of the strategy should track recommendations from the 2010 report of the Independent Review of Federal Support for Research and Development, including approaches to encourage greater availability of capital for innovative start-ups; value-based procurement practices to encourage adoption of high impact innovations; and support for commercialization and export of successful products.

• The strategy should be adapted to the unique features of healthcare (e.g., regulatory requirements, primacy of patient safety, large-scale public purchasers, influence of providers on procurement processes, etc.), including addressing fragmentation through a simplified process that is easy to navigate for industry.

9 .4 Through the new Healthcare Innovation Agency of Canada, with federal investments from the Healthcare Innovation Fund, support the spread and scale-up of measures to improve procurement, including consideration of value- based approaches and best practices internationally such as the competitive dialogue process in the EU .

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108 | CHAPTER 9 — HEALTHCARE AND ECONOMIC PROSPERITY Chapter 10 Tax Policy in Support of Healthcare System Change

“The hardest thing in the world to understand is the income tax.”

Albert Einstein UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Tax Policy in Support of Healthcare System Change

Earlier chapters in this report discuss the historical evolution our underperformance were addressed in Chapter 2. In of publicly funded healthcare in Canada, and identify fact, a 70 percent proportion of public spending was first growing gaps in performance on accessibility and quality tallied in 1970, as universal medical services coverage took of care that require urgent attention. The Panel has made hold across Canada. That proportion peaked at 75 percent the case that a Healthcare Innovation Fund, in tandem in 1980, fell minimally to 74 percent in 1990, and then with a new agency, the Healthcare Innovation Agency of declined slowly to its current level of 70 percent in the late Canada, could provide catalytic support for new partnerships 1990s.5 The proportions of publicly- and privately-financed and meaningfully enhance the performance of Canada’s spending have been more or less stable since then. healthcare systems. In the last few chapters, the Panel has set out its analysis and offered advice on five key areas for That stability, however, masks a problem – growth in out- innovation where inter-jurisdictional and wider of-pocket spending (as contrasted with spending through collaboration could have the largest impact. These chapters private insurance plans or another third party). That growth also highlight where the Fund and the Agency could most in turn bears more heavily on low-income Canadians – a usefully focus resources to promote collaboration and bring burden that could be mitigated by tax policy. about high-impact changes in Canadian healthcare. Considerations of equity also arise when one considers In each of the priority areas for innovation, the Panel has Canada’s aging population. This demographic trend will also made recommendations on actions that the federal see a relative increase in management of chronic health government could take in its own sphere of responsibility problems as opposed to the utilization of acute, episodic and using the levers at its disposal. One of these levers – care that characterizes younger individuals and families.269 tax policy – is left to this chapter to explore, not because Older Canadians will increasingly need healthcare services it is more or less important than the others, but because and supports in the community or at home. Community- it is relatively under-appreciated as a federal healthcare based care is a better option than institutional care in many lever and can potentially address issues that cut across all cases – better for patient experience, for health outcomes, five priority areas for innovation. and more economical for the healthcare system. However, this shift is likely to increase the financial burden on Beyond the obvious role of general taxation as the main patients and their families. Here, too, tax policy has the source of funding for Canada’s healthcare system, tax potential to both encourage this transition and cushion its policy is not typically thought of as an instrument of financial impact on Canadians. healthcare policy. However, it is part of the landscape of financial incentives affecting all healthcare stakeholders: The Panel does not view these recommendations as the patients, healthcare providers and institutions, innovators, definitive solution to long-standing health insurance and public and private payers. It therefore has an impact gaps in Canada, but as an innovative way forward to on the choices made by all of these actors, and on the address unfairness in paying for healthcare while reducing broader goals of economic efficiency and equity in the the differential in public support for healthcare services tax system. Furthermore, although health-related tax so as to improve efficiency. This approach does not vitiate expenditures are small relative to federal health transfers the need to achieve universal coverage for prescription to provinces and territories, they represent significant drugs, to consider how new delivery models and bundled foregone revenue by federal government, exceeding what payment mechanisms might allow cost-effective the government spends directly on healthcare through expansion of public coverage for a variety of services, its internal programming. and many other policy changes that might strengthen Canadian healthcare and restore its international lustre. In deciding to frame recommendations on tax policy, the Nonetheless, it is relatively straightforward for the federal Panel took other points into consideration. government to make changes in this area, and the Panel believes that these measures would bring some much As noted earlier, 30 percent of Canada’s total spending on needed financial relief to patients with high out-of-pocket healthcare is privately financed as compared to 70 percent healthcare expenses. public spending.5 Arguments that this split accounts for

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Current Health-Related Tax and products used in the production of healthcare. For Expenditures example, hospitals, regional health authorities, and government-funded eligible charities and non-profit Health-Specific Tax Expenditures organizations that provide healthcare services similar to those traditionally performed in hospitals are eligible for a Figure 10.1 sets out the principal federal health-related tax GST/HST rebate that reimburses them for 83 percent of the expenditures as reported annually by Finance Canada,270 GST or federal portion of the HSTxxxvii paid on a broad range which is the lead department at the federal level on all matters of goods and services used by these entities in the delivery pertaining to tax policy. In total, these tax measures provided of health services. Charities and qualifying non-profit support in the order of $7 billion in 2014.270 The overall goal organizations, including those that provide health services of these measures is to ensure that where possible, the tax but are not eligible for the 83% rebate, claim a 50 percent system reduces or at least does not add to the burden of rebate of the GST/HST (federal portion) on their purchased financing needed healthcare services, as well as ensuring inputs.274 HST participating provinces provide rebates of equitable tax treatment for households as between those the provincial portion of the HST at varying rates determined with members who have chronic medical conditions and by the province.274 those without. This is accomplished in four ways. Fourth, a relatively new thrust of tax incentives aims to First, some of these measures are designed to recognize encourage healthy behaviours. Through the Fitness Tax the cost of privately funded healthcare goods and services Credit275, parents can claim eligible expenses for children that are paid by individuals and/or to recognize the under 16 years of age participating in a prescribed program additional burden placed on disabled individuals or families of physical activity. The 2015 federal budget proposed caring for infirm dependents. Under the Medical Expense the creation of a Panel to study the potential scope of a Tax Credit (METC)271, individuals can claim a portion of similar credit for adults. Given the epidemic of childhood eligible medical expenses as a tax credit to reduce income obesity and broader concerns about the dietary habits of tax that would otherwise be payable. A refundable version Canadian families, the Panel sees merit in extending this of this credit ensures that low income working individuals credit to out-of-pocket costs incurred for nutritional can benefit from support regardless of whether they pay counselling for children under 16 years of age. However, income tax. The Family Caregiver Tax Credit272 and a full costing of this concept was not feasible, and some Disability Tax Credit273 provide tax relief to those who care relief from the cost of these services is provided under for an infirm dependent relative, or to individuals who the general recommendations that follow. have a severe and prolonged impairment in physical or mental functions. A summary of these health-related tax measures are outlined in figure 10.1. The second policy approach is to exempt healthcare goods and services purchased by individual from being taxed, While all of these tax measures are worthy of examination, again with the goal of reducing the burden placed on the Panel focused its attention on the three measures which individuals to finance needed healthcare services. The account for over half of the value of health-related tax non-taxation of health and dental benefits falls into this expenditures. Two of these help to recognize out-of-pocket category. In practice, this means that employer-paid healthcare costs faced by Canadians, but they may impose premiums from employer-sponsored private insurance a sizeable administrative burden on tax filers, particularly plans are not taxed in the hands of the employees who for complex cases. receive the benefits. In contrast, other employer-paid premiums for employee benefits, such as employer- • The main provision is a non-refundable tax credit for sponsored life insurance, are a taxable benefit to employees. eligible medical expenses that can be claimed if they GST/HST health measures ensure that patients are not exceed three percent of an individual’s net income or charged GST/HST on privately-paid prescription drugs, $2,171, whichever is less (for the 2014 tax year). xxxviii certain medical devices, or healthcare services such as physiotherapy or services.

xxxvii Some provinces receive a 100% rebate (i.e., Alberta, New Brunswick). The third policy approach is to offset the burden on publicly- xxxviii Provinces and territories offer similar credits against provincial/territorial income taxes payable for medical expenses, although the threshold amounts funded healthcare institutions that pay taxes on services vary by jurisdiction.

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Figure 10.1: Health-Related Tax Measures (with Projected Federal Revenues Foregone for 2014)

Non-taxation of employer-paid health and dental benefits $2 065. billion

Medical Expense Tax Credit (METC) $1 .425 billion

Refundable Medical Expense Supplement for low-income working Canadians $150 million

Disability Tax Credit $750 million

GST/HST zero-rating for medical devices and prescription drugs $1 12. billion

GST/HST exemption for healthcare services $670 million

GST/HST rebate for hospitals $620 million

Children’s Fitness Tax Credit $130 million

Total $6 .93 billion

Source: Adapted from: Department of Finance Canada. Tax Expenditures and Evaluations 2014. Ottawa: Department of Finance Canada; 2015. Available from: http://www.fin.gc.ca/taxexp-depfisc/2014/taxexp14-eng.asp

• An additional refundable medical expense supplement taxation of these benefits under the provincial income tax is available for working individuals with low incomes system in 1997. Those individuals who purchase health and high medical expenses. To be eligible for the insurance may claim the premiums as medical expenses supplement, taxpayers must claim medical expenses under the METC. and/or disability supports, and have combined family net income of less than $48,546.xxxix The maximum refundable supplement is $1,152 (for the 2014 tax Other Tax Measures Linked to Health year) or 25 percent of the claimed disability supports and medical expenses above the three percent/$2,171 The federal government also provides vehicles for threshold for the METC, whichever is less.xl The Canadians to save for the future, which potentially could supplement is reduced by five cents for each dollar be used to pre-fund health expenditures. These include of combined net income above $25,506, completely incentives for Canadians to save in general (e.g., the Tax disappearing at $48,546. Free Savings Account), for retirement savings (Registered Pension Plans and Registered Retirement Savings Plans) The third measure – the non-taxation of health and dental or savings for the long-term financial security of individuals benefits – is significant, though it is not administratively with disabilities (Registered Disability Savings Plans). complex. Approximately 24 million Canadians have some form of health coverage through private insurance.276 Beyond these savings vehicles, the tax system provides Under the federal Income Tax Act, premiums paid for support for a range of other activities that support health coverage under group private health insurance plans are and healthcare objectives. These include tax credits to non-taxable to the employee. The same is true at the support charitable giving, a good portion of which benefits provincial level, except for Quebec, which introduced health sector charities that invest in research on a range of diseases. Support for health-related research and development activities performed by the private sector is xxxix In contrast to the METC which is based on an individual’s net income, the supplement is calculated based on both the individual’s and spouse’s net also provided through the Scientific Research and income. Combined net income refers to the net income of the tax filer and Experimental Development Tax Credit, which was the spouse, if applicable. subject of a separate federal review in 2011.277 Finally, the xl Disability supports are expenses paid for personal attendant care and other supports allowing an individual to go to school or earn income. so-called “sin” taxes on tobacco products and alcohol are,

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at least in part, intended to deter unhealthy behaviour. While the growth of out-of-pocket payments is slightly The Panel did not explore these areas in any depth as its lower than the rate of expenditure growth for hospitals, mandate was focused on system innovations in support doctors, and drugs, it remains a key healthcare pressure, of healthcare delivery. increasing 4.7 percent annually between 1988 and 2012.278

A growing body of evidence indicates decreasing equity Are Existing Tax Measures in access to core healthcare services in Canada as a result Adequate? of increasing out-of-pocket health costs. As shown in figure 10.2, growth in out-of-pocket expenditures has been During the Panel’s consultations, several participants raised particularly acute for the lowest income quintile, resulting concerns about the adequacy of existing measures to help in a 40 percent increase in the proportion of households Canadians bear the cost of services not covered by the existing spending more than five percent of after-tax income on Medicare system (i.e., home care, prescriptions, etc.). healthcare.279 The second-lowest income quintile represents an additional risk group due to lack of eligibility for various As outlined in Chapter 2, Canada’s healthcare system relies public insurance programs.279 extensively on private payment to finance services beyond the core hospital and physician services. As noted above, Canadians most affected by high out-of-pocket costs of the $215 billion in estimated total health expenditures include certain lower-income Canadians (particularly the for 2014, 30 percent was privately-funded, of which it is working poor) without access to publicly funded prescription projected that 12 percent will be through private insurance drug plans, and those without employer-provided private and fully 15 percent will be paid out-of-pocket.5 Out-of- health insurance (including some self-employed) and their pocket expenditures include deductibles and copayments families. for publiclyxli or privately insured services, and direct out- of-pocket expenditures for non-insured health services. The burden of high out-of-pocket costs is sub-optimal The largest categories of private out-of-pocket spending from both equity and efficiency points of view: in 2012 were: prescription drugs ($6.4 billion); long-term care and other institutions ($6.0 billion); dental care ($4.7 • From an equity point of view, access to important and billion); over-the-counter drugs ($2.9 billion); vision care large segments of the healthcare system is hindered ($2.6 billion); and personal health supplies ($2.1 billion).5 for some individuals based on characteristics such as the province in which an individual resides, income, age, and employment status. For example, the Panel xli As explained in Chapter 1, these co-payments or deductibles can apply to heard from stakeholders in the northern communities publicly-insured services that are outside the requirements for first-dollar coverage defined by the Canada Health Act. that it is not uncommon for persons to travel 200

Figure 10.2: Percentage of Households with Out-of-Pocket Expenditures on Healthcare More Than 5 Percent of Total Household Income, by Household Income Quintile, Canada Excluding Territories, 1997 to 2009

Household 1997 to 2009 income 1997 1999 2001 2003 2005 2007 2009 Percent change quintile Q1 (lowest) 26 29 30 33 34 37 37 40 Q2 30 33 35 37 38 39 36 23 Q3 23 25 26 30 30 29 31 33 Q4 16 19 19 21 22 22 19 16

Q5 (highest) 10 9 10 13 13 13 14 42

(Source: Statistics Canada, Survey of Household Spending)

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kilometres or more to receive a specialized health The current non-taxability of employer-provided health services or diagnostic testing with a corresponding and dental benefits creates unfairness as well as distorting cost that they pay for out-of-pocket. the choice of compensation paid by public and private employers. Those individuals who are not able to participate • This situation is also inefficient because there is a bias in employer-provided plans receive on average less tax towards publicly funded services, which are sometimes relief for premiums under the Medical Expense Tax Credit. the most expensive services. For example, lack of access Further, as several studies have documented, the non- to prescription drugs and home care could lead to taxation of health and dental benefits have led to higher avoidable hospitalizations. growth in this form of compensation compared to salaries.280

Under the GST/HST, there are different levels of rebates “We strongly encourage the government to provided to offset GST/HST paid on goods and services incent Canadians to take a proactive approach by public service bodies such as municipalities, hospitals, charities and not-for-profit organizations. This can result to their personal healthcare through a full tax in distortions in the allocation of resources. The Panel deduction on extended health benefits for heard in its consultations that municipal bodies providing those who do not have them sponsored by home care are eligible for a 100% rebate for the GST or federal portion of the HST paid on their inputs while a their employers.” charity only receives a 50% rebate. This reflects the existing system in which MUSH sectors (municipalities, universities Stakeholder Submission and public colleges, schools and hospitals) and charities generally do not charge GST/HST for their services and receive varying degrees of rebates on their inputs. The Tax policy could be used to address high private costs by original reason in 1991 for a partial rebate given to these providing tax relief for current expenses or incentives for bodies was to maintain the same level of tax as under the Canadians to save in advance for future healthcare costs. manufacturers’ sales tax that was replaced by the GST More broadly, tax policy could be adapted to support change (municipalities were fully refunded GST on inputs at a in the healthcare system, such as the movement of later time). The Panel recommends, therefore, that the healthcare services from facility-based services to Department of Finance examine the current partial rebate community-based services, as well as support public health system to reduce distortions. initiatives to improve the health of Canadians. “…we are asking the Government to increase The Panel recognizes that the efficiency and equity issues related to tax support for health services have to be the HST rebate on all eligible purchases made considered within the context of tax policy in general. The by publicly-funded, not-for-profit institutions credit provided for medical, caregiver and disability costs under the Income Tax Act recognizes the additional costs in the health sector to 100 percent putting borne by individuals to achieve a minimal standard of hospitals on par with municipalities.” living. If such costs were not recognized under the Income Tax Act, individuals and families requiring health services Stakeholder Submission would be treated less fairly than those who do not require such services. Similarly, provisions that provide tax support for health services should not distort economic decisions The Panel believes, obviously, that any tax support for in other contexts. Hefty tax relief directed at healthcare healthcare services should not undermine the overall services could distort household spending decisions integrity of the tax system. However, in this case, more towards healthcare. tax support is needed, especially for lower-income Canadians, and such measures would be consistent with The Panel particularly notes two examples by which the overall objectives of both tax and health policy. suggestions for certain tax measures causes distortions and unfairness in the tax system.

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A Refundable Health Tax Credit for a single individual and up to $6,000 per year for a family with two or more members.) Therefore the The Panel notes that the current Medical Expense Tax maximum tax credit would be $750 for a single person or Credit (METC) and Refundable Medical Expense $1500 for a family. Any health expenses covered by the Supplement provide limited tax relief for out-of-pocket RHTC would not eligible for other tax credits. Provinces healthcare services. Claims can be made in excess of would have the option of adopting the new credit in their specific thresholds as mentioned above. Further the METC tax systems, thereby potentially increasing the value of can only be used if the taxpayer has sufficient tax to be the credit significantly. paid. Although the Refundable Medical Expense Supplement helps provide some support for families with Under this program, the full value of the tax credit would modest income, it is limited to medical costs in excess of be available to families (two or more members) with same limits applied to METC. incomes below $89,000 and individuals below $44,000. The credit would be income-tested for each individual The Panel believes that additional tax support for health- taxpayer such that the eligible expenses would be reduced related costs paid by Canadians would provide more by five cents for each dollar of income above $44,000. support for community-based services, complementing the provision of hospital and physician services. It is The Panel’s proposal focuses on costs in relation to especially important to support lower-income Canadians community-based care rather than supplemental charges who bear a significant cost relative to their means. Further, incurred during hospitalization in an acute care institution. expanded tax support would improve the income tax Eligible categories include prescription drugs, certain system by recognizing better costs incurred by households pharmaceutical supplies, dental services, premiums on to fund their needs. qualifying health and dental plans, long-term care insurance, attendant care and vision care. These categories total approximately 80 percent of existing privately-funded Designing the New Tax Credit expenses. Consideration could be given to including the cost of certain health-promoting and disease-preventing Considerable complexity arises from the limits imposed interventions as eligible expenditures, especially if research by the METC that reduces the provision of healthcare evidence supports the effectiveness of those interventions. services. As many taxpayers often do not qualify for the METC due to limits, they are less likely to maintain proper documentation for tax filing when they are eligible to Administering the New Tax Credit claim the METC. To enable greater ease in claiming both the refundable The limits under the METC are a particular problem in health tax credit and medical expense credit, the Panel achieving a more efficient, fair and simpler tax treatment recommends that a new T6 slip be introduced whereby of health costs. When expenses are claimed under the providers of insurance, drugs, dental services and other METC, federal support is only 15 cents on the dollar for qualifying services provide a taxpayer the amounts of expenses that are either above the threshold of 3 percent medical expenses that can be claimed for the RHTC and of a tax filer’s net income or $2,171, whichever is lower. METC or just the METC alone. This would significantly In addition, it is a non-refundable credit. The system simplify the system for taxpayers who currently must keep should focus on the major expenditures that are eligible individuals slips provided by suppliers. for tax support from the first dollar281 and at a higher value than 15 percent given the burden faced by many families. The Panel also recommends that the government enable It can also encourage pooling by enabling more individuals low income individuals to receive their credits on a quarterly to purchase private insurance. basis based on a previous year’s information of expenditure patterns and income. This could only apply to recurring The Panel therefore proposes a Refundable Health Tax health expenditures such as drug expenditures and Credit (RHTC) that would be focused on those families premiums, as currently done with the GST low-income with modest incomes. The federal tax credit would be 25 tax credit. Non-recurring expenditures cannot be predicted percent of qualified health expenses up to $3,000 per year and therefore claims for the credit can only be done when (additional expenses would be claimable under the METC filing income taxes.

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Costing the New Credit billion as shown in figure 10.3. The net change in the Medical Expense Tax Credit reduced by expenses allocated The existing Refundable Medical Expense Supplement to the refundable tax credit but increased by employer-paid would be cancelled since it applies on a very limited basis. health and dental premiums is -$542 million. The taxation of employer-provided premiums yields $5.2 billion in The Panel also recommends that employer- paid premiums revenue and the cancellation of the existing medical for health and dental benefits be made a taxable benefit expenses supplement yields another $157 million.283 to the employee. This would be consistent with the tax treatment of other employer-paid premiums for benefits Those households with incomes below $100,000 will pay such as life insurance, which are a taxable benefit to less tax. Higher income households will pay more tax employees. Removing the tax-free status of employer-paid primarily as a result of the taxation of employer-provided health insurance premiums eliminates a labour market health and dental benefits. The Panel has considered other distortion. Employees in receipt of that benefit are still combinations of income thresholds and maxima for the better off than employees without workplace health and refundable credit. Both the cost of the Refundable Health dental insurance, while employers retain an advantage in Tax Credit and the related redistributive effects vary recruitment that is fair rather than being privileged through predictably as one changes those parameters. The Panel tax policy. The premiums for employer-paid health fully understands that the Government of Canada may insurance should be deemed an eligible expense under choose to modify the model, but recommends the the new RHTC and existing METC, similar to the current combination of thresholds shown in figure 10.3 as a fair policy related to self-paid premiums. Thus, premiums way forward. should be eligible for a tax credit whether paid by the employee or employer.282 Taken together, the Panel believes these measures would make a significant contribution to offset growing out-of- Overall, this proposal is revenue-neutral and consistent pocket healthcare costs borne by Canadians, and increase with the Panel’s Terms of Reference. The gain to families equity among Canadians in terms of the tax treatment of associated with the Refundable Health Tax Credit is $5.9 these expenses.

Figure 10.3: Tax Impact on Families (Single and Multiple Members) by Income Groupxlii

Total value Revenue from new Change in Net Change Change in of new grant Family Total tax on employer medical Per METC credit with Income ($) health and dental supplement household Cost ($000s) clawback benefits ($000s) cost ($000s) income ($) ($000s) Min-25,000 -162,075 1,608,859 -775,950 -76,941 92 25,001-50,000 -277,675 1,757,335 -796,357 -76,549 136 50,001-100,000 -279,899 2,281,219 -1,680,251 -3,443 61 100,001-150,000 68,377 261,530 -1,060,090 0 -322 150,001-200,000 63,071 2,151 -483,992 -3 -491 200,001-Max 45,852 1,378 -426,200 -12 -551

All -542,348 5,912,472 -5,222,840 -156,948 0

xlii Based on calculations provided by Philip Bazel, researcher from the University of Calgary.

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Recommendations to the Federal Government

10 . 1 Through the Department of Finance, and in collaboration with Health Canada, pursue the following initiatives:

• Examine the current partial GST/HST rebate system for public sector bodies to reduce distortions arising from differential tax treatment of hospitals, municipalities, non-for-profit organizations and charities that deliver healthcare services.

• Create a new Refundable Health Tax Credit (RHTC) to provide tax relief of 25 percent on eligible out-of- pocket healthcare expenditures up to $3,000 per year, replacing the Refundable Medical Expense Supplement.

οο The RHTC would apply to the first-dollar spent on eligible expenses, and would be income-tested, with the full value of the credit made available to lower-income Canadians who bear a significant cost relative to their means. It would be administratively simple for tax filers, with tax slips issued by insurers and providers of health services. Payments to individuals with recurring expenses could be made on a quarterly basis.

• Make employer-paid premiums for employer- sponsored health and dental benefits a taxable benefit to the employee, while permitting employees to claim this expense as a qualifying medical expense under the new RHTC or METC.

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118 | CHAPTER 10 — TAX POLICY IN SUPPORT OF HEALTHCARE SYSTEM CHANGE Chapter 11 Concluding Summary UNLEASHING INNOVATION: EXCELLENT HEALTHCARE FOR CANADA

Concluding Summary

The Advisory Panel on Healthcare Innovation received provider groups and sectors – emerged as the most its mandate from the Honourable Rona Ambrose and important structural barrier to both new reform initiatives began work in late June 2014. The Panel was charged and effective scaling-up of well-tested ideas and programs. with identifying five priority areas where action by the This shortcoming appeared to be operating in a vicious federal government could promote innovation in Canadian cycle with slow deployment and incomplete utilization of healthcare systems. It was also asked to advise the modern information technology. Minister on important enabling actions that could be taken by the Government of Canada, acting within its The Panel observed further that Canada’s healthcare legitimate jurisdiction. systems appeared to be ill-prepared to respond to various shifts in their context. Patients are demanding more participation in their own care and engagement with the Background design of healthcare programs. As the population ages, there will be a greater premium on seamless delivery of In the course of its deliberations, the Panel received scores multi-disciplinary care across diverse settings, not least of submissions from organizations and individuals, the patient’s place of residence. The digital revolution conducted on-line consultations, crisscrossed the country continues to disrupt many enterprises, and sooner or later for in-person discussions with a wide range of stakeholders, will transform healthcare. Moreover, accelerating advances reviewed literature and commissioned research studies, in biotechnology are now ushering in an exciting but and spoke with experts in both domestic and international challenging new era of precision medicine. Canada has healthcare policy. These interactions consistently brought pockets of research leadership in this field, but only one home two points. small province has taken steps towards implementation of the required learning systems to make precision medicine First, consistent with polls showing that Canadians are a clinical reality. concerned about the state of their healthcare systems, the Panel heard from many stakeholders who see the need for Meanwhile, polling data show that the majority of fundamental changes in how healthcare is organized, Canadians no longer believe that an increase in operating financed, and delivered. funds is the primary solution to the perceived shortcomings of their healthcare systems. The Panel’s review suggested that these concerns were well-founded. Canada’s healthcare systems remain a source of national pride and provide important services Critical Areas for Healthcare to millions of Canadians every week, the scope of public Innovation coverage is narrow, and their overall performance by international standards is middling, while spending is high relative to many OECD countries. Canada also Weighing all these inputs, and consistent with its mandate, appears to be losing ground in performance measures the Panel identified five broad areas where federal action relative to peers. was important to promote innovation and enhance both the quality and sustainability of Canadian healthcare. Second, pockets of extraordinary creativity and innovation These were: dot the Canadian healthcare landscape. Local, regional and even provincial programs worthy of emulation have • patient engagement and empowerment simply not been scaled up across the nation. • health systems integration with workforce Many barriers to effective scaling-up were identified by modernization stakeholders. One key challenge was the lack of any dedicated funding or mechanism to drive systemic • technological transformation via digital health and innovation. As well, the fragmented nature of the system precision medicine – with separate budgets and accountabilities for different

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• better value from procurement, reimbursement and and the absence of a cadre of dedicated and expert regulation personnel who can support efforts to initiate and scale up improvements in healthcare across Canada. • industry as an economic driver and innovation catalyst.

To make recommendations for action on these fronts, the Collaboration for Healthcare Panel first examined the federal government’s role in the Innovation: New Model, New evolution of Canada’s universal healthcare systems. Agency, New Money

The Evolving Federal Role The Panel understands that sustaining six percent compounded growth in the federal transfer is difficult in In the 1950s and 1960s, federal investments built capacity the present fiscal circumstances. It has not recommended for healthcare across Canada, and, through conditional any changes to the current plans for transfers. It has also cost-sharing, induced provinces and territories to adopt rejected a return to earlier approaches that depended on universal coverage for hospital costs and physician services unanimously agreed priorities and formulaic allocations on more or less uniform terms. Those conditions were of funds. Instead, having examined the scope and scale weakened by new cost-sharing arrangements in the 1970s, of the problem, and having examined international and but reaffirmed in 1984 with the Canada Health Act. domestic precedents, the Panel is recommending two key enabling actions. Starting in the 1980s and intensifying through to the mid-1990s, successive federal governments unilaterally The first is a consolidation of the mandates of three existing reduced transfers to the provinces and territories. Fiscal agencies and expansion of capacity to create a new vehicle circumstances eased, and from the late 1990s to 2004 for accelerated change. As a placeholder, this agency has Ottawa steadily augmented funding for healthcare. By been termed the Healthcare Innovation Agency of Canada agreement, these new funds were earmarked to achieve (HIAC). HIAC would draw on staff from the Canadian specific objectives, albeit distributed on a formulaic basis. Foundation for Healthcare Improvement, the Canadian The largest of these initiatives moved an additional $3.2 Patient Safety Institute, and, after a transition period for billion per year to the provinces and territories. Some completion of its existing projects, Canada Health Infoway. laudable progress was made – for example, waiting times for specific services were reduced. However, the Panel’s The second is the provision of fuel for both that vehicle view is that, overall, this period and these investments and to support provinces and territories as they strengthen led neither to modernization of the architecture of their healthcare systems with fundamental reforms and Canadian healthcare, nor to serious broadening of the work with stakeholders to scale up well-tested innovations. scope of public coverage. These funds would flow to ‘coalitions of the willing’ – jurisdictions, institutions, providers, patients, industry, and The last ‘Health Accord’ of this nature committed the federal committed innovators of all backgrounds. Again as a government to make six percent annual increases in the placeholder, this has been termed the Healthcare Innovation Canada Health Transfer. In 2011 the federal government Fund (hereafter, the Fund, for short). unilaterally determined that, after expiry of the 2004 agreement and starting in 2017-18, it would reduce the About the new Agency: As exemplified by seven pan- annual rate of growth to the rate of GDP growth or three Canadian health organizations and the Canadian Institutes percent per annum, whichever was larger. of Health Research (CIHR), this approach to supporting national collaboration in specific areas has been used for Already facing fiscal pressures, the provinces and territories more than two decades. CIHR is the largest of these entities have intensified their cost containment measures and with an annual outlay of approximately $1 billion per responded with collaborative initiatives such as group annum. However, its primary mandate has been – and purchasing of prescription pharmaceuticals. However, in should remain - the funding of academic research. Each the Panel’s view, these and other commendable front-line of the other entities has a specific focus on elements of efforts to improve healthcare and augment its value are innovation, and each can claim unique strengths. However, limited in part by a serious shortfall in working capital, none has had a broad innovation mandate, and none has

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anything like the scale to take on such a role. In contrast, Theme 1: Patient Engagement and HIAC as a new Agency would be dedicated to catalyzing Empowerment change in real-time, evaluating the impacts of those changes, and accordingly rejecting, revising and re- evaluating, or scaling up the resulting innovations. The Panel reviewed evidence showing a large gap between the rhetoric of patient-centred care and the experience of HIAC should be an arm’s length organization, supported many patients and families in modern healthcare systems. through the Healthcare Innovation Fund, governed by a It was also encouraged by many teams, institutions and group of eminent Canadians appointed on merit alone, systems in Canada that have been taking positive steps to and linked to one or more advisory committees composed bridge rhetoric and reality. At a system or subsystem level, of representatives of a range of stakeholders, not least the Panel recommends implementation of various models provincial and territorial governments. Its corporate of payment and accountability organized around patients’ structure should enable it to provide robust, independent needs, rather than the existing revenue streams of providers oversight and direction for a range of projects, including and institutions. At the institutional or regional level, those fielded across Canada with support from the priority must be given to implementation and scaling-up Innovation Fund.xliii of the many programs that have yielded positive results as regards patient-centred care and patient and family About the new Fund: The Healthcare Innovation Fund’s engagement in the design and evaluation of healthcare broad objectives would be to effect sustainable and systemic programming and systems. changes in the delivery of health services to Canadians. Its general goals would be to: support high-impact The Panel has also identified an acute need for developing initiatives proposed by governments and stakeholders; and implementing information tools for patients in two break down structural barriers to change; and accelerate distinct areas. The first is the promotion of health and the spread and scale-up of promising innovations. It would healthcare literacy. The second is the scaling-up of best not be allocated on the basis of any existing transfer practices in the use of patient portals, ensuring that patients formulae, nor would its resources be used to fund provision effectively co-own their health records. Patient engagement of healthcare services that are currently insured under and co-ownership of health records would be further federal, provincial and territorial plans. Allocations would facilitated through mobile and digital health solutions that instead be made on the basis of rigorous adjudication enable virtual care and empower patients, while meeting against transparent specifications, having particular regard common standards and interoperability requirements. The for measurable impacts on health outcomes, creation of role of government in this milieu will be very different economic and social value, sustainability, scalability, and than was the case when Infoway began building information a commitment by partners to sustain those innovations infrastructure in 2001. As outlined under Theme 3, a that are demonstrably successful. transition in structures and roles is warranted.

The Panel recommends that these two initiatives should begin as early as possible in the mandate of the Government Theme 2: Health Systems Integration that will take office after the election of October 2015. The with Workforce Modernization outlay from the Fund should rise as needed, with the expectation that a steady-state target of $1 billion per annum might in ideal circumstances be reached as early The Panel observed substantial symbiosis between an as 2020. The Agency and the Fund would be important integrated healthcare system and an innovative one. US enablers for many of the specific recommendations made group health plans illustrate how, even within a very by the Panel in each of the five identified areas that are challenging context, integrated healthcare systems offer priorities for innovation. Unless otherwise specified, the patients enhanced access, along with high quality care Fund and HIAC should be assumed to be the leads from from multi-professional and multi-specialty teams, at costs the federal side in what follows. lower than current Canadian per capita spending. Supporting the implementation and iterative improvement of integrated healthcare demonstrations and ‘bundled xliii As noted earlier, the combined enterprise represented by the Agency payment’ models must accordingly be a high priority for and Fund might be reflected by a collective moniker, such as Healthcare Innovation Canada. the Agency and Fund. Where possible, demonstrations

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should be implemented that integrate healthcare and social those digital resources, secure access to patient records by services or that otherwise provide specific incentives to authorized users to enable safe and seamless care, assurance addressing social needs, protecting and promoting health, of digital access to their own records for patients, or preventing disease. development of virtual care applications, and achievement of sufficient inter-operability and standardization of data These shifts in payment and accountabilities operate to permit more effective use of all these data for performance synergistically with changes in professional roles and measurement and advanced analytics. The Panel has responsibilities. Best practices in inter-professional care recommended action on all those fronts. should be scaled up, with particular attention paid to implementing the recommendations of the Canadian As noted earlier, the Panel envisages the short-term Academy of Health Sciences report on Optimizing Scopes continuation of Canada Health Infoway, with bridge of Practice (2014). In a similar vein, the Panel recommends funding that will enable it to complete current projects. a collaborative national initiative to examine roles, Thereafter, as the agenda shifts from info-structure to responsibilities, and payment of health professionals in uptake and applications, Infoway would merge into HIAC relation to generation of value. and all further funding for its partnerships should flow through the Fund. These general priorities for more integrated care carry additional weight in the realm of Aboriginal healthcare. CIHI would be supported to provide greater transparency A number of recommendations are accordingly directed about healthcare in Canada and to lead ‘open data’ efforts. to Health Canada and its First Nations and Inuit Health CIHI would also be expected to pursue more intensive Branch on this topic. Among these are co-creation of a data-gathering on three fronts: the 30% of healthcare First Nations Health Quality Council and a parallel liaison spending that flows from private sources; health services committee for Inuit representatives, drawing together for, and health of First Nations, working in partnership Aboriginal representatives and patients, and representatives with the First Nations Quality Council; and patient- of provincial and territorial governments. Experimentation oriented outcome measures. CIHI and the new Agency is already underway with new models of co-governance would partner with provinces and territories to develop of health services for First Nations; the Panel urges information appropriate to support integrated delivery continued exploration of these models along with careful models, including different forms of bundled payments. evaluation, ensuring always that service transfers are Lastly, CIHI would need to ensure greater information commensurate with resources. A range of other concerns dissemination to a range of audiences – particularly the have also been surfaced for action. Inter alia, these include: general public -- of the information it gathers. improved health infrastructure and health human resources for reserves, the administration of the Non-Insured Health About Precision Medicine: The rapid development of Benefits program and its integration with provincial and sophisticated biomarkers is disrupting the prevention, territorial systems, and the need for new models of care diagnosis, and treatment of illness – indeed, redefining that will mitigate costs and burden of travel. existing diseases and their prognoses. Canada has pockets of strength in precision medicine, and a nascent research strategy has been led by CIHR. However, what is notably Theme 3: Technological absent is a national strategy for innovation, i.e., implementing Transformation via Digital Health and these concepts into front-line care. For example, the Panel saw meaningful scope to improve the use of prescription Precision Medicine drugs by applying these techniques – but limited uptake. The Panel’s recommendations are designed to ensure that A third priority for innovation is to capitalize on the exciting Canada’s diverse populations and single-payer healthcare developments underway in the generation and application systems can be leveraged to our national advantage. It is of health data and knowledge. particularly important to develop and begin following a roadmap to ensure that Canada’s healthcare information About Health Data and Electronic Health Records: and communications technology will support these data- Development of info-structure has accelerated in Canada, intensive models of care and the rapid-cycle innovations with wider uptake of electronic health records. However, that characterize precision medicine as a field. The Panel Canada lags on many fronts, including meaningful use of also urged the scaling-up of models of care in subfields of

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precision medicine that are relatively more mature, such as and practices persist. To this end it recommended funding pharmacogenomics and cancer diagnosis and treatment. It for, and careful evaluation of the impact of, Choosing perceives that there is substantial potential for the Wisely Canada. commercialization of made-in-Canada concepts and tools in the precision medicine field, provided that a nimble implementation strategy can be launched as recommended. Theme 5: Industry as an Economic Driver and Innovation Catalyst Theme 4: Better Value from Procurement, Reimbursement and Other nations are adopting policies designed both to nurture a domestic healthcare industry and to reshape Regulation interactions with multinational companies that provide healthcare goods and services. The underlying motivation As noted, on a value-for-money basis in healthcare, Canada is clear: publicly-funded healthcare is invariably a valued is lagging many peer nations. The Panel concluded that social program, but can also contribute to economic changes to healthcare finance, purchasing and regulation development. The Panel’s review found that Canada lags could improve the value received by Canadians in areas other jurisdictions such as Denmark and the UK in policies such as prescription drugs, physician services, and medical and processes of this nature. In particular, for both drugs technologies. Most of the related recommendations are and devices, Canada’s regulatory environments and markets directed to Health Canada or existing federal agencies. are characterized by fragmentation, duplication, and inconsistencies. Pharmaceutical products stood out as a concern, given Canada’s extremely high per-capita outlays, our outlier The Panel has accordingly recommended a number of status as a country with universal healthcare programs but changes, including creation of a Healthcare Innovation inequitable and uneven coverage of prescription drugs, Accelerator Office, to be housed in HIAC, focused on and the cost pressures looming from new biological accelerating the adoption of potentially disruptive compounds. The Panel strongly supports the principle that technologies that show early promise of value for money every Canadian should be able to afford necessary drugs, to the system and benefit for patients. HIAC should also but sees demonstration of wide improvements in pricing support the spread and scale-up of improved procurement as a prudent precursor to extending coverage, and is processes, e.g. value-based approaches and best practices concerned that, absent integration and alignment of such as the competitive dialogue process used by the incentives, a new stovepipe of spending on pharmaceuticals European Union and MaRS Excite. may not have the anticipated cost-control effects. To this end, it has recommended that existing federal drug plans Some of the recommendations in the recent Review of reaffirm their desire to join the Council of the Federation’s Federal Support to R&D (2010) will require customization pan-Canadian Pharmaceutical Alliance (pCPA) and that for the unique features of healthcare enterprises, but are HIAC offer to serve as the secretariat, in conjunction with highly relevant to health-related Canadian companies, exploring strategies to extend the reach of this alliance to particularly small and medium-sized enterprises. In this private insurance plans. regard, drawing on insights from the 2010 Review, Health Canada should work in tandem with a range of stakeholders In contrast to current industry practice of confidential inside and outside the federal government to develop a rebates, the Panel supports a national push for full whole-of-government strategy that would support the transparency of net prices paid, so that all stakeholders growth of Canadian commercial enterprises in the have enough information to make informed choices. As healthcare field. well, the high price of pharmaceuticals and move to collective procurement both suggest the need for a review In the chapters covering Themes 4 and 5, the Panel is of the policies and practices of the Patented Medicines recommending a number of improvements to the Pricing Review Board. mechanisms for assessing and regulating drugs and devices, targeting variously Health Canada and its Health Products Last, the Panel observed that some effective technologies and Food Branch, and the Canadian Agency for Drugs and and practices are slow to diffuse, while obsolete technologies Technologies in Health (CADTH). Under theme 5, the

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Panel urges attention to regulatory enhancements that associated with an inequitable burden on lower-income might reduce duplication and enable higher quality and Canadians. The inequitable distribution of this burden will faster reviews without compromising Canada’s current also be exacerbated by population aging given that about standards for drug and device safety. $6 billion was spent out-of-pocket on long-term care and billions more in other supplies and services that are used at a much higher rate by senior citizens. Consensus and Fairness as Healthcare Evolves In recommending changes to tax policy that will enhance fairness, the Panel emphasizes that these are transitional measures: they do not vitiate the need to achieve universal A Federal Role in Consensus-Building: Many of the coverage for prescription drugs nor the adoption of new Panel’s recommendations have cross-cutting implications. delivery models that might allow cost-effective expansion For example, a more integrated healthcare system has a of public coverage. much higher probability of yielding a patient-centred experience than one in which patients and families navigate The Panel’s core recommendation in this regard is an a poorly coordinated care with uneven coverage and income-scaled Refundable Health Tax Credit (RHTC). The incomplete sharing of health records. In the same vein, RHTC would replace the existing supplement and, like interwoven through the report are a number of that supplement, , be applied in conjunction with the recommendations that broadly enable innovation through existing Medical Expense Tax Credit. The RHTC would consensus-building with or without related legislative or provide tax relief of 25 percent on eligible out-of-pocket regulatory action. They are gathered and summarized here. healthcare expenditures up to $3,000 per year, starting with the first dollar spent on eligible expenses. Additional Technological and social innovation in healthcare have expenses would be claimable under the existing Medical already generated a variety of ethical and legal issues. The Expense Tax Credit. Provinces would have the option of Panel recommends that Health Canada in partnership with adopting the new credit in their tax systems, thereby the new Agency should take the lead in consultation and potentially increasing its value. consensus building across provinces and territories to anticipate such issues, and resolve legislative ambiguities Related recommendations address how the administration as needed. Obvious pressure points are physician-assisted of the RHTC could be structured to help ease the cash-flow dying and genetic discrimination. However, a national burden of out-of-pocket health costs on individuals and consensus is also needed on protection of patient privacy families with modest incomes. Furthermore, the cost of while enabling innovation (e.g. in precision medicine and this credit would be fully offset both by cancelling the genomics, mobile health, and various forms of digitized existing supplement and, more importantly, by taxing the health records). The Panel has been similarly struck by employer-paid premiums for employer-sponsored private continued confusion – and the potential of inter- health and dental plans. This expense, however, would be jurisdictional inconsistencies – on the matter of patients’ considered as a qualifying medical expense under the new access to and co-ownership of their personal health records. RHTC and/or METC, meaning that employees could claim Last, but not least, in an era when Open Data and Big Data it on their income tax return. The Panel believes that these are seen as twinned enablers of data-driven innovation, measures, in their totality, enhance fairness among Canadian governments and research agencies have failed taxpayers, as well as helping to mitigate an unfair and to forge a consensus on how broad sharing of appropriately growing burden of out-of-pocket healthcare costs on anonymized health-related data can safely occur across Canadians with modest incomes. and within jurisdictions. As noted, this is critical not only for rapid innovation in the field of precision medicine, but for enhancing applied health research and data-driven Concluding Reflections innovation in Canada’s healthcare delivery systems. The collection of universal healthcare insurance programs Financial Fairness in a Period of Transition: Canada’s colloquially known as ‘Medicare’ continues to offer essential total proportion of private spending on healthcare has services to millions of Canadians, and remains the nation’s been more or less stable at 30% since the late 1990s, but most iconic social program. However, Medicare is aging out-of-pocket spending is rising in relative terms. This is badly. The Panel has been left in no doubt that a major

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renovation of the system is overdue, and is chagrined and puzzled by the inability of Canadian governments – federal, provincial, and territorial – to join forces and take concerted action on recommendations that have been made by many previous commissions, reviews, panels, and experts.

At the outset of the current review, Panel members sensed that some stakeholders expected a quasi-commercial ‘Dragon’s Den’ exercise – the tidy delineation of five quick fixes or big trends, a spotlight on a few made-in-Canada solutions offered by enterprising teams in the private or public sectors, and some policy palliatives that would justify placing healthcare on the federal backburner. Panel members, including the late Dr. Cy Frank, believed in contrast that their mandate could only be fulfilled by taking a wide-angle view of healthcare innovation.

To that end senior officials in Health Canada have consistently supported the Panel members in their work, and taken in stride the fact that some of the Panel’s findings might shine a critical light on the Department itself. For her part, Minister Rona Ambrose has been meticulous in respecting the Panel’s independence. The Panel would add that by excellent example, the Minister has illustrated the positive role that facilitative federal leadership can play in Canadian healthcare. It bears repeating, however, that no elected or appointed officials of any government, not least the Government of Canada, should be assumed to endorse any of the interpretations, opinions, or recommendations advanced in this report.

In conclusion, the Panel reiterates that, with bold federal action and prudent investment, and with a renewed spirit of collaboration and shared political resolve on the part of all jurisdictions, Canadian healthcare systems can change course. What has been proposed above is specifically designed to move Canada toward a different model for federal engagement in healthcare – one that depends on an ethos of partnership, and on a shared commitment to scale up existing innovations and make fundamental changes in incentives, culture, accountabilities, and information systems. As stated in the Foreword to this report, we do not pretend that this model offers an immediate remedy for the ills of Canadian healthcare. However, we have a high degree of confidence that concerted action on our major recommendations can make a meaningful difference that will be seen and felt across Canada by 2025.

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Appendix 1: List of Recommendations

A . Collaboration for Healthcare Innovation: New Model, New Agency, New Money

New Model, New Money

Starting in 2015-16, create a ten-year Healthcare Innovation Fund with a gradual ramp-up, ideally reaching steady- state by 2020 (4.1).*

• The Fund’s broad objectives would be to effect sustainable and systemic changes in the delivery of health services to Canadians. Its general goals would be: to support high-impact initiatives proposed by governments and stakeholders, to break down structural barriers to change, and to accelerate the spread and scale-up of promising innovations.

• The Fund will not be allocated on the basis of any existing transfer formulae, nor will its resources be used to fund provision of health services that are currently insured under federal, provincial and territorial plans. Funds will be allocated on the basis of rigorous adjudication against transparent specifications, having particular regard for measurable impacts on health outcomes, creation of economic and social value, sustainability, scalability, and commitment of relevant stakeholders to sustaining successful initiatives.

• The annual outlay from the Fund should rise over time towards a target of $1 billion per annum, derived primarily from new federal commitments.

• The Fund’s initiatives will be grouped under five priority themes:

οο patient engagement and empowerment

οο health systems integration with workforce modernization

οο technological transformation via digital health and precision medicine

οο better value from procurement, reimbursement and regulation

οο industry as an economic driver and innovation catalyst

New Agency

Create the Healthcare Innovation Agency of Canada to work with a range of stakeholders as well as governments to set the long-term vision for the healthcare system and healthcare innovation goals across the Panel’s proposed five areas of focus (4.2).

• The Agency should provide oversight and expertise for the Fund, in keeping with the twin goals of removing structural barriers and supporting spread and scale-up, with the long-term aim of improving Canada’s standing internationally on key metrics of health system performance.

* Numbers in brackets refer to the location of the recommendation as set out in the body of the report.

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• The Agency should be an arm’s length organization, funded by the federal government. It should be governed by a group of eminent Canadians, who would be supported by one or more advisory committees composed of representatives of a range of stakeholders (provincial and territorial governments, patients, providers, industry and others). Its corporate structure should enable it to provide robust, independent oversight and direction for the Fund.

• The Agency should catalyze and coordinate collaboration with the pan-Canadian health agencies and the Canadian Institutes for Health Research to ensure alignment of activities.

• Shift funding and staff for both the Canadian Foundation for Healthcare Improvement and the Canadian Patient Safety Institute to the new Healthcare Innovation Agency of Canada (4.3).

οο This recommendation reflects the relevance of the mandates of both organizations to the promotion of healthcare innovation. It will also reduce duplication, provide some economies of scale for the federal government, and streamline a crowded pan-Canadian health organization field.

• Continue Canada Health Infoway pro tem as a separate organization with staffing to complete projects currently underway. Once the new Agency is established, fold relevant functions from Infoway into the Agency, and flow future federal funding for digital health through the Innovation Fund (4.4).

B . Specific Recommendations by Theme

Theme 1: Patient Engagement and Empowerment

Through the new Healthcare Innovation Agency of Canada, with federal investments from the Healthcare Innovation Fund, pursue the following priorities (5.1):

• Support provinces, territories, and regional health authorities in undertaking large-scale projects that implement highly integrated delivery systems that test new forms of payment, where care is organized and financed around the needs of the patient.

• Develop and implement a strategy to promote patient and family-centred care in partnership with governments, patients, providers and others. Elements of this strategy would include:

οο Developing and implementing information tools that patients need.

οο Creating incentives for greater patient engagement at the organizational and system level, with the goal of improving models of care and system design.

οο Sourcing and supporting mobile and digital health solutions that meet needed common standards and interoperability requirements.

Adopting and deploying best practices in the development and use of patient portals, including best practices internationally.

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Theme 2: Health Systems Integration with Workforce Modernization

Through the new Healthcare Innovation Agency of Canada, alongside federal investments from the Healthcare Innovation Fund, promote integrated delivery systems across Canada.

Relevant themes follow (6.1):

• Develop, implement, and evaluate strategies for ensuring that integrated delivery arrangements in Canada address social needs and determinants of health, protect and promote health, and prevent disease.

• Support provinces, territories, and regional health authorities in adapting, scaling up and spreading partial integration models, e.g. primary care commissioning, portfolio funding for disease management, and assorted bundled payment strategies. Where possible, introduce elements of competition through tendering or bidding for care contracts.

• Support pan-Canadian multi-sectoral collaboration to implement the recommendations of the Canadian Academy of Health Sciences 2014 report Optimizing Scopes of Practice.

• Review and identify the best practices in inter-professional shared care, with specific reference to leading integrated delivery models. Promote adaptation, scaling-up and spreading of similar practices in Canadian jurisdictions.

• Collaborate with provinces and territories, professional associations and others on a pan-Canadian pay commission to examine the relative value of healthcare services in terms of cost, provider activity and patient outcomes, thereby helping decision-makers evaluate professional roles, payments and prices.

Through Health Canada, and its First Nations and Inuit Health Branch, pursue the following priorities (6.3).

• Co-create a First Nations Health Quality Council, in partnership with First Nations representatives and patients, and with provincial and territorial governments. This Council would report on the quality and safety of care for First Nations across all sectors and regions. A priority for the First Nations Health Quality Council should be collaboration with CIHI for data development and collection relevant to First Nations (see Recommendation 7.6).

• Co-create a tripartite liaison committee with Inuit representatives and patients, and with the relevant provincial and territorial governments. The mission of this committee would parallel that of the First Nations Health Quality Council.

• Support First Nations leaders, together with willing provinces or territories and other partners, not least the Federal Government to initiate, evaluate and scale up new models of co-governed integrated care in varied locations across Canada. Managed by First Nations, these holistic entities should be modelled on international best practices, such as the Alaska Native Tribal Health Consortium or the Nuka System of Care.

• Facilitate the transfer of federal healthcare delivery programs to interested First Nations communities, working in partnership with First Nations leadership in those communities and the relevant province or territory, while ensuring that service transfers are accompanied by commensurate resources.

• Continuously monitor existing initiatives that transfer responsibility for services, such as the BC First Nations Health Authority, to ensure that devolution strategies are effective, efficient, and equitable.

• Improve the health infrastructure and health human resource capacity on reserve to meet patients’ needs.

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• Work with First Nations, Inuit, and other stakeholders to improve the management and responsiveness of the Non-Insured Health Benefits (NIHB) program to enhance access to care through digital technologies and ensure that it provides coverage comparable to other public and private plans.

οο To this end, the federal government should provide quasi-statutory authorities to Health Canada to adjust or expand health benefits offered through NIHB within an overall financial framework set by Parliament.

οο Through the combined resources of the Healthcare Innovation Fund, the Healthcare Innovation Agency of Canada, Health Canada, relevant provincial and territorial partners, First Nations and Inuit communities and others, develop new models of virtual and physical care to mitigate the hardships incurred by patients and families when First Nations and Inuit peoples travel to receive healthcare.

Theme 3: Technological Transformation via Digital Health and Precision Medicine

Through Infoway initially and then through the Healthcare Innovation Agency of Canada, accelerate the deployment of interoperable electronic health records across points of care, including efforts to assist providers and payers in meaningful use and prioritizing the creation of online portals where patients have mobile access to their own records (7.5).

• Ensure future investments in health information technologies are standardized, interoperable, linked across multiple sites, and available to third parties for assessment of performance.

With support from the Healthcare Innovation Fund, and building on current efforts by organizations such as CIHI, provide greater transparency about healthcare in Canada, by (7.4):

• Enabling more accessible and user-friendly information on areas including patient satisfaction, quality, safety, efficiency, effectiveness and health outcomes.

• Leading “open data” efforts, by making data available to a wide range of stakeholders, including the public, to enable development of new tools and approaches.

• Developing partnerships to build the capacity of health system stakeholders to use data for health system improvement.

• Exploring mechanisms to gather and share data about activity in healthcare’s private sector – corresponding to the 30 percent of spending that is not supported by public funds.

Through the Canadian Institute for Health Information, and in partnership with the First Nations Quality Council, address the significant data gaps that exist in the area of First Nations health, providing a fuller picture, of First Nations health status, as well as access to care, and quality of services (7.6).

Through the Canadian Institute for Health Information, in collaboration with interested provinces and territories, and with supplemental support from the Healthcare Innovation Fund as needed, pursue the following priorities (6.2):

• Expedite work to develop methodologies adaptable for use in physician capitation payment and in designing integrative or bundled payments based around common episodes of care.

• Accelerate work in the area of patient reported outcome measures (PROMs) and patient costing data, including case costing data, to create national risk-adjusted patient grouping methodologies and other tools.

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Through the Healthcare Innovation Fund and new Agency, develop and initiate a national Strategy for Implementation of Precision Medicine, in concert with provinces, territories, healthcare and health research agencies, and a range of relevant stakeholders and experts (7.1).

• This field is characterized by a blurring of the lines between applied research, innovation, and implementation at scale. The Strategy should seek to leverage Canada’s diverse populations and single-payer healthcare systems as a competitive advantage.

• The Strategy should include development of a roadmap of steps needed to ensure that Canada’s health information and communications technology can support data-intensive models of care and the rapid-cycle innovations that characterize this field.

• The Strategy should focus on:

οο Developing and implementing mechanisms to adopt, scale up, and contribute new clinical insights from across the global field of precision medicine.

οο Establishing a global leadership position in the systematic uptake and iterative improvement of Precision Medicine methods as applied to clinical care across Canada.

οο Ensuring that national and international collaboration is maximized, and that data are shared widely with due regard for privacy and security.

οο Fostering the development of the Canadian talent pool not only in the relevant biological and clinical fields, but in data analytics and software development.

οο Promoting the commercialization of made-in-Canada precision medicine concepts and tools.

Through the Healthcare Innovation Fund, and in partnership with federal and provincial research and innovation agencies, accelerate the implementation of the above-noted Strategy by assessing and scaling up models of care in the field of Precision Medicine (7.2).

• Potential starting points with wide impact include pharmacogenomics in diverse clinical fields, and precision/ personalized cancer care.

οο A major commitment of funds will be needed to launch the broad Strategy across Canada as well as to effect clinical scaling-up in select fields.

Theme 4: Better Value from Procurement, Reimbursement and Regulation

Through Health Canada, expand the Government of Canada’s approach to regulating drugs beyond drug safety to better support system decision-making on the cost- effectiveness of drugs (8.2).

• Consider therapeutic benefits in addition to safety benefits in its approval process.

• Require drug manufacturers to conduct comparative effectiveness studies.

• Adjust cost recovery for drug approvals to privilege high impact and value drugs over “me too” drugs.

• Provide advice to system decision-makers on the interchangeability or similarity of biologics and subsequent entry biologics.

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Through Health Canada, accelerate work on transparency in its regulatory processes. This should include providing advance notice as to which products it has under review to permit decision-makers to plan their budgets accordingly. It also must include making public all data on the safety and effectiveness of drugs and devices (8.3).

Re-orient the Canadian Agency for Drugs and Technologies in Health (CADTH) to better support innovation by providing real-time advice to decision-makers on drugs and medical devices, and support CADTH to (8.6):

• Build up its expertise and increase its turnover related to its decisions on technologies to reflect their rapid life-cycle, including partnering with provincial initiatives that seek to align the pre-market and post-market assessment processes.

• Benchmark its turnaround against similar health technology assessment agencies internationally, which play a central role in providing rapid-cycle guidance on the cost-effectiveness of drugs and technologies.

• Assume the responsibilities of the Drug Safety and Effectiveness Network (DSEN; currently located in CIHR), which supports research into the post-market safety and effectiveness of drugs, given the natural affinity of this work with CADTH’s mandate.

• Examine and make recommendations related to practices that are becoming obsolescent, such as those that no longer provide optimal patient outcomes.

Coordinate and integrate existing federal drug plans and reaffirm federal desire to join the Council of the Federation’s pan-Canadian Pharmaceutical Alliance (8.1).

Through the new Healthcare Innovation Agency of Canada, with federal investments from the Healthcare Innovation Fund (8.5):

• Offer to serve as the secretariat for a pan-Canadian Drug Purchasing Alliance.

• Work with public and private payers, as well as the pharmaceutical industry and pharmacists, to explore options to that would improve transparency about drug prices, and ensure that prescribers and patients have enough information to make informed choices.

• Collaborate with provincial, territorial, and private drug plans on strategies to extend the reach of collective purchasing strategies to all Canadians including the potential for bringing private insurers into the pCPA.

Review the Patented Medicines Pricing Review Board to assess its relevance and strengthen its role in protecting consumers against high drug prices in an era of enhanced collective procurement and coordinated national pricing (8.4).

Through the new Healthcare Innovation Agency of Canada, with federal investments from the Healthcare Innovation Fund (8.5):

• Pursue support for the implementation of the Choosing Wisely Canada initiative in all jurisdictions and carefully evaluate its impact.

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Theme 5: Industry as an Economic Driver and Innovation Catalyst

Create a Healthcare Innovation Accelerator Office, housed in the Healthcare Innovation Agency of Canada, to (9.1):

• Work with federal, provincial and territorial ministries of health and other stakeholders to accelerate the adoption of potentially disruptive technologies that show early promise of value for money to the system and benefit for patients.

οο This would include interacting with companies in pre-market processes to reduce post-market redundancy (viz. European Union practices, or the MaRS EXCITE model) .

Through the new Healthcare Innovation Agency of Canada, with federal investments from the Healthcare Innovation Fund, support the spread and scale-up of measures to improve procurement, including consideration of value-based approaches and best practices internationally such as the competitive dialogue process in the EU (9.4).

Through Health Canada, in collaboration with Industry Canada, develop a whole-of-government federal strategy to support the growth of Canadian commercial enterprises in the healthcare field (9.3).

• The strategy should consider the needs of Canadian companies in the generation, domestic commercialization, and export of products and services, as well as in attracting foreign investment to the health field.

• Elements of the strategy should track recommendations from the 2010 report of the Independent Review of Federal Support for Research and Development, including approaches to encourage greater availability of capital for innovative start-ups; value-based procurement practices to encourage adoption of high impact innovations; and support for commercialization and export of successful products.

• The strategy should be adapted to the unique features of healthcare (e.g., regulatory requirements, primacy of patient safety, large-scale public purchasers, influence of providers on procurement processes, etc.), including addressing fragmentation through a simplified process that is easy to navigate for industry.

Through Health Canada, accelerate regulatory harmonization and convergence, while ensuring that safety remains paramount, to streamline domestic processes with international standards in recognition of the global nature of the pharmaceutical and medical devices industry. Priorities should include (9.2):

• Providing advice to small and medium-sized enterprises on how to navigate the healthcare system, including developing a roadmap of processes and supports.

• Partnering with the US Food and Drug Administration in order to reduce redundancy without compromising Canada’s high standards around the safety of products.

Consensus and Fairness as Healthcare Evolves A Federal Role in Consensus Building

Through Health Canada, take the lead in consultation and consensus building across provinces and territories on emerging ethical and legal issues arising from technological and social innovation in healthcare, and bring forward needed legislative changes in a timely fashion (5.2).

Through Health Canada, request the federal Privacy Commissioner to work with provincial and territorial privacy commissioners to develop a common understanding on how to protect privacy while enabling innovation (e.g. in precision medicine and genomics, mHealth, and various forms of digitized health records) across Canada (5.3).

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• Privacy commissioners should be asked to consider how their respective legislative frameworks could be better harmonized across Canada to reduce any unnecessary duplication or confusion that could impede innovation.

Through the new Healthcare Innovation Agency of Canada, with federal investments from the Healthcare Innovation Fund (5.1):

• Support the development of policy and legislative tools to enable patient access to, and co-ownership of, their own personal health records.

Convene a federal, provincial and territorial dialogue on a pan-Canadian framework that will protect Canadians while putting put Canada at the forefront of applied genomics and precision medicine, including (7.3):

• Regulatory and legislative amendments to prohibit genetic discrimination, such as changes to the Canadian Human Rights Act, the Criminal Code, the Personal Information Protection and Electronic Documents Act, and the federal Privacy Act.

• Policies to enable broad sharing of appropriately anonymized data across and within jurisdictions.

οο This is critical not only for rapid innovation in the field of precision medicine, but for enhancing applied health research and data-driven innovation in Canada’s healthcare delivery systems.

Financial Fairness in a Period of Transition

Through the Department of Finance, and in collaboration with Health Canada, pursue the following initiatives (10.1):

• Examine the current partial GST/HST rebate system for public sector bodies to reduce distortions arising from differential tax treatment of hospitals, municipalities, non-for-profit organizations and charities that deliver healthcare services.

• Create a new Refundable Health Tax Credit (RHTC) to provide tax relief of 25 percent on eligible out-of-pocket healthcare expenditures up to $3,000 per year, replacing the Refundable Medical Expense Supplement.

οο The RHTC would apply to the first-dollar spent on eligible expenses, and would be income-tested, with the full value of the credit made available to lower-income Canadians who bear a significant cost relative to their means. It would be administratively simple for tax filers, with tax slips issued by insurers and providers of health services. Payments to individuals with recurring expenses could be made on a quarterly basis.

• Make employer-paid premiums for employer-sponsored health and dental benefits a taxable benefit to the employee, while permitting employees to claim this expense as a qualifying medical expense under the new RHTC or METC.

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Appendix 2: Full List of Acknowledgments

The Panel would like to recognize the great many individuals and organizations, listed below, whose contributions helped to shape the Panel’s deliberations and final report.

Invited Presentations

The Panel wishes to thank the following individuals for their presentations to the Panel: Michael Green, Trevor Hodge, and Graham Scott (Canada Health Infoway); Terrence Sullivan, Brian O’Rourke, and Bernadette Preun (Canadian Agency for Drugs and Technologies in Health); Leslee Thompson, Maureen O’Neil, Stephen Samis (Canadian Foundation for Healthcare Improvement); David O’Toole, Brent Diverty, and Jeremy Veillard (Canadian Institute for Health Information); Alain Beaudet, Christian Sylvain, Michel Perron (Canadian Institutes of Health Research); Shelly Jamieson and Nicole Beben (Canadian Partnership Against Cancer); Hugh MacLeod, Catherine Gaulton, and Kim Stelmacovich (Canadian Patient Safety Institute); Simon Kennedy and Paul Glover (Health Canada); Abby Hoffman (Strategic Policy Branch, Health Canada); Mary-Luisa Kapelus (First Nations and Inuit Health Branch, Health Canada); Don Husereau (Institute of Health Economics); David Goldbloom and Jennifer Vornbrock (Mental Health Commission of Canada); David Williams and Jovan Matic (Ontario Health Innovation Council); and G. Ross Baker (University of Toronto) and Maria Judd (Canadian Foundation for Healthcare Improvement).

Senior Health Officials

The Panel wishes to thank the following senior health officials for contributing their time and counsel via meetings, roundtable discussions, correspondence, site visits, and other activities: Hon. Fred Horne and Janet Davidson (Government of Alberta), Hon. Glen Abernethy and Debbie DeLancey (Government of the Northwest Territories), Colleen Stockley (Government of Nunavut), Hon. Mike Nixon, and Paddy Meade (Government of Yukon), Stephen Brown (Government of British Columbia), Karen Herd (Government of Manitoba), Tom Maston (Government of New Brunswick), Hon. Steve Kent and Bruce Cooper (Government of Newfoundland and Labrador), Peter Vaughan (Government of Nova Scotia), Hon. Eric Hoskins and Bob Bell (), Michael Mayne (Government of ), Hon. Gaétan Barrette (Government of Quebec), Hon. Dustin Duncan and Max Hendricks (Government of Saskatchewan), and George Da Pont and Simon Kennedy (Government of Canada).

National and Regional Stakeholder Consultation Sessions

The Panel would like to acknowledge the hundreds of individuals who attended the Panel’s national and regional stakeholder consultation sessions, which were held across Canada, and extends its thanks to Mary Pat MacKinnon, Ellis Westwood, Tristan Eclarin, and Heather Fulsom of Ascentum Inc. for their organizational support.

National Stakeholder Association Meeting (Ottawa, Ontario), attended by Wendy Nicklin (Accreditation Canada), David Moorman (Canada Foundation for Innovation), Vinita Haroun ( for Long Term Care), Jeremy Veillard (Canadian Institute for Health Information), Emmanuelle Hébert (Canadian Association of ), Janet Craik (Canadian Association of Occupational Therapists), Paul Geneau (Canadian Association of Optometrists), Elaine Orrbine (Canadian Association of Paediatric Health Centres), Graham D. Sher (Canadian Blood Services), Gabriel Miller (Canadian Cancer Society), Gary MacDonald (Canadian Dental Association), Jim Keon (Canadian Generic Pharmaceutical Association), Ivy Bourgeault (Canadian Health Human Resources Network), Gail Crook (Canadian Health Information Management Association), Nadine Henningsen (Canadian Home Care Association), Sharon Baxter (Canadian Hospice Palliative Care Association), Cindy Forbes (Canadian Medical Association), Mark Ferdinand (Canadian Mental Health Association), Karima Velji (Canadian Nursing Advisory Committee), Jane Farnham (Canadian Pharmacists Association), Kate Rexe (Canadian Physiotherapy Association), Glenn Brimacombe (Canadian Psychiatric

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Association), Ian Culbert (Canadian Public Health Association), Wendy Therrien (Colleges and Institutes Canada), Marsha Sharp (Dietitians of Canada), Glenn Brimacombe and Karen Cohen (Health Action Lobby), Connie Côté (Health Charities Coalition of Canada), Bill Tholl (HealthCareCAN), Michael Schull (Institute for Clinical Evaluative Sciences), Nicole DeKort and Brian Lewis (MEDEC), Renata Osika (National Alliance of Provincial Health Resource Organizations), Ryan Wiley (Research Canada), Cecil Rorabeck (Royal College of Physicians and Surgeons of Canada), Francine Lemire (The College of Family Physicians of Canada), Suzanne Corbeil (U15 Group of Canadian Research Universities), Tofy Mussivand (University of Ottawa), and Jo-Anne Poirier (Victoria Order of Nurses Canada).

Edmonton, Alberta, attended by Peter Silverston (Addiction and Mental Health Strategic Clinical Network), Deborah Marshall (Alberta Bone and Joint Institute), Donna Durand (Alberta Council on Aging), L. Miin Alikhan (Alberta Health), Andrew Neuner (Alberta Health Quality Council), Deb Gordon, Troy Stooke, and Kathryn Todd (), Tim Murphy and Pamela Valentine (Alberta Innovates Health Solutions), Donald Back (Alberta Innovates Technology Futures), Don Dick and Linda Woodhouse (Bone and Joint Strategic Clinical Network), Colleen Norris and Blair O’Neill (Cardiovascular Health and Stroke Strategic Clinical Network), Mehadi Sayed (Clinisys), Colleen Enns (Edmonton Oliver Primary Care Network), Brian Rowe (Emergency Strategic Clinical Network), Isabel Henderson (Glenrose Rehabilitation Hospital), Chad Saunders (Haskayne School of Business), Duncan Robinson (Seniors Health Strategic Clinical Network), Tyler White (Siksika Health Services), Chris Lumb and Randy Yatscoff (Tech Edmonton), Christopher McCabe and Doug Miller (), Herbert Emery (University of Calgary), and Jann Beeston (Volunteer Alberta).

Halifax, Nova Scotia, attended by Dianne Calvert-Simms (Cape Breton Health Authority), Lynn Edwards, Rick Gibson, and Steven Soroka (Capital District Health Authority), Marjorie Willison (Chebucto Connections), Stewart Cameron, Michael Dunbar, Ray LeBlanc, Marilyn Macdonald, David Petrie, Victor Rafuse, and Gail Tomblin Murphy (Dalhousie University), Sarah MacDonald (Guysborough Antigonish Strait Health Authority), Chad Munro (Halifax Biomedical Inc.), Patrick McGrath (IWK Health Centre), Travis McDonough (Kinduct Technologies), Christine Grimm and Eleanor Hubbard (Nova Scotia Department of Health and Wellness), Krista Connell (Nova Scotia Health Research Foundation), Janet Knox (Provincial Health Authority), and Bill Bean (QEII Foundation).

Regina, Saskatchewan, attended by Angela Muzyka and Beth Vachon (Cypress Health Region), Pauline Rousseau and Mark Wyatt (Ministry of Health, Government of Saskatchewan), Greg Marchildon (Johnson Shoyama Graduate School of Public Policy), the late Lawrence LeMoal (Patients’ Voices), Meredith Faires and Kathy Malejczyk (Regina Qu’Appelle Health Region), Gary Teare (Saskatchewan Health Quality Council), Tom McIntosh (University of Regina), Beth Horsburgh, and Cathy Jeffery (University of Saskatchewan), Dana Monette and Justin Monette.

Toronto, Ontario, attended by Frank Gavin (Canadian Family Advisory Network), Martin Vogel (Canadian Medical Association), Tai Huynh (Choosing Wisely Canada), Gabriela Prada (Conference Board of Canada), Zayna Khayat (MaRS EXCITE), David Price (McMaster University), Erik Yves Landriault (Royal Danish Consulate General (Toronto)), Helen Angus, Nancy Kennedy, and Suzanne McGurn (Ministry of Health & Long Term Care, Government of Ontario), Vasanthi Srinivasan (Ontario SPOR Support Unit), Edward Brown (Ontario Telemedicine Network), Jeffrey Turnbull (Ottawa Hospital), Sandy Schwenger (PatientCare Solutions), Andrea Englert-Rygus (Plexxus), PJ Devereaux (Population Health Research Institute), Lesley Larsen (Saint Elizabeth), Joshua Liu (Seamless MD), John Puxty (St. Mary’s of the Lake, Providence Care), Michael Julius (Sunnybrook Health Sciences Centre), Wendi Bacon (TD Bank), Jennifer Stinson (Toronto Hospital for Sick Children), Janet Martin, Paul Paolatto, and Anne Snowdon (University of Western Ontario), Joan Fisk (Waterloo Wellington Local Health Integration Network), and Sacha Bhatia (Women’s College Hospital).

Vancouver, British Columbia, attended by Richard Lester (British Columbia Centre for Disease Control), Shirley Vickers (British Columbia Innovation Council), Nancy Paris (British Columbia Institute of Technology), Warner Adam and Travis Holyk (Carrier Sekani Family Services), Nathalie Dakers (CDRC Ventures Inc.), Bruce McManus (Centre of Excellence for the Prevention of Organ Failure (PROOF)), Karimah Es Sabar (Centre for Drug Research and Development), Christine Penney (College of Registered Nurses of British Columbia), David Ostrow (Fraser Health), Paul Drohan (LifeSciences British Columbia), Alexandra Greenhill (Medeo), Diane Finegood (Michael Smith Foundation for Health

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Research), Heather Davidson, Doug Hughes, and Lynn Stevenson (Ministry of Health, Government of British Columbia), Olive Godwin (Prince George Division of Family Practice), Leanne Heppell and Margot Wilson (Providence Health Care), Stefan Fletcher (RebalanceMD), Ryan D’Arcy and Paul Terry (Simon Fraser University), Allen Eaves (Stemcell Technologies Inc.), Catherine Helliwell (THINKPHC), Jim Christenson, Martin Dawes, Kendall Ho, Nancy Meagher, Steve Morgan, Geoff Payne, and Roanne Preston (University of British Columbia), and Wendy Hansson (Vancouver Coastal Health).

Winnipeg, Manitoba, attended by Andrea Kwasnicki (Canadian Diabetes Association), Marion Cooper (Canadian Mental Health Association of Winnipeg), Daniel Lussier (Catholic Health Corporation of Manitoba), Elaine Csupak (Eveline Street Clinic), Naranjan Dhalla (International Academy of Cardiovascular Sciences), Preetha Krishnan (Lions Personal Care Centre), Bob Thompson (Manitoba Caregiver Advisory Committee), Diana Clarke (Manitoba Centre for Nursing and Health Research), Dave Schellenberg (Manitoba Council on Aging), Brie Demone, Geof Langen, and Marcia Thomson (Manitoba Health), Doug McCartney (Manitoba Innovation, Energy and Mines), Sheila Carter (Manitoba Métis Foundation), Brenda Dawyduk (Northern Regional Health Authority (Manitoba)), Denise Widmeyer (Patient Safety Initiatives), Christina Weise (Research Manitoba), Michel Tétreault (St. Boniface Hospital), Charles Burchill, Kevin Coombs, Neal Davies, Terry Klassen, Sara Kreindler, Alan Menkis, Beverly O’Connell, Caroline Snider, and Roberta Woodgate (University of Manitoba), Martha Ainslie and Ken Rannard (Winnipeg Regional Health Authority), and Roxanne Myslicki (Youville Community Health Centre).

Regional and Site Visits

The Panel wishes to thank the following individuals and organizations for their hospitality and for sharing their time and expertise over the course of the Panel’s regional and site visits.

Baltimore, Maryland and Washington D.C., United States, organized with support from Pierre-Gerlier Forest, Angelina Filipova, and Becky Newcomer of the Bloomberg School of Public Health, Johns Hopkins University; staff from the Office of Global Affairs, United States Department of Health and Human Services; Greg Alcock of the Brookings Institution; Jason Sutherland of the University of British Columbia; Marcy Opstal of the Agency for Healthcare Research and Quality; and Stefanie Mosier and Andrew Phillips of the Office of International Affairs, Health Canada; attended by Pierre-Gerlier Forest, Greg Alcock, Jason Sutherland and Marcy Opstal (above), Jeffrey Brady, Steven Cohen, Steven Hill, Ernst Moy, and Quyen Ngo-Metzger, (Agency for Healthcare Research and Quality), Gerard Anderson, Karen Davis, James Gilman, Hadi Kharrazi, Michael Klag, David Peters, Joshua Sharfstein, and Albert Wu (Bloomberg School of Public Health, Johns Hopkins University), Keith Fontenot, Elaine Kamarck, Alice Rivlin, and Louise Sheiner (Brookings Institution), Gilles Gauthier (Embassy of Canada in Washington), Cynthia Anderson, Amy Bassano, Patrick Conway, Ashley Corbin, Darren DeWalt, Ryan Galloway, Sheila Hanley, Ed Hutton, Karen Jackson, Frances Jensen, James Johnston, Mary Kapp, Pauline Lapin, Linda Magno, Renee Mentnech, Doug Nock, Mai Pham, Rahul Rajkumar, Noemi Rudolph, Darshak Sanghavi, and Naomi Tomoyasu (Center for Medicare and Medicaid Innovation), Stuart Guterman and Robin Osborn (Commonwealth Fund), and Cristina Rabadan-Diehl and Alyson Rose-Wood (US Department of Health and Human Services).

New Brunswick, organized with support/participation of Trish Fanjoy and Lyne St-Pierre-Ellis (Department of Health, Government of New Brunswick); attended by Matthew Crossman (Ambulance NB), Gérin Girouard, Renée Laforest, Bruce MacFarlane, Nancy Roberts, Jennifer Russell, Joanne Stone, and Mark Wies (Department of Health, Government of New Brunswick), Marlien McKay (Department of Healthy and Inclusive Communities, Government of New Brunswick), Anne Macies (Department of Intergovernmental Affairs, Government of New Brunswick), Derrick Jardine (FacilicorpNB), John McGarry (Horizon Health Network), Stephane Robichaud (New Brunswick Health Council), Anthony Knight (New Brunswick Medical Society), Jennifer Dickison and Marilyn Quinn (New Brunswick Nurses Union), Paul Blanchard (New Brunswick Pharmacists Association), Roxanne Tarjan (Nurses Association of New Brunswick), and Jean Castonguay (Vitalité Health Network).

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Newfoundland and Labrador, organized with support/participation of Chad Blundon and Tara Power (Department of Health and Community Services, Government of Newfoundland and Labrador), James Rourke (Memorial University of Newfoundland); attended by Rosemarie Goodyear (Central Health), Karen Stone (Department of Health and Community Services, Government of Newfoundland and Labrador), Mark Ploughman (Department of Innovation, Business and Rural Development, Government of Newfoundland and Labrador), Tony Wakeham (Labrador-Grenfell Health), Deborah Kelly, Pat Parfrey and Proton Rahman (Memorial University of Newfoundland), and Mike Barron (Newfoundland and Labrador Centre for Health Information).

Northwest Territories, organized with support/participation from Kyla Kakfwi-Scott (Department of Health and Social Services, Government of Northwest Territories); attended by Ewan Affleck, Karen Blondin Hall, Sabrina Broadhead, Jim Corkal, André Corriveau, Sue Cullen, Derek Elkin, and Alicia Tumchewics, (Department of Health and Social Services, Government of the Northwest Territories), with a special thanks to Debbie DeLancey.

Nunavut, attended by Maureen Baikie, Johan Sebastian Glaudemans, Gogi Greeley, Linnea Ingebrigtson, Rosemary Keenainak, and Alexander MacDonald (Department of Health, Government of Nunavut), Darlene McPherson (Iqaluit Health Services), and James Eetoolook (Nunavut Tunngavik Incorporated), with a special thanks to Colleen Stockley.

Yukon, attended by Lori Duncan (Council of Yukon First Nations), Cecilia Fraser, Sabrina Kinesella, Shannon Ryan, Sharon Specht, Emily Wale, and Sherri Wright (Department of Health and Social Services, Government of Yukon), Gaye Hanson (Hanson and Associates), Jeanie Dendys and Carmen Gibbons (Kwanlin Dün First Nation), with a special thinks to Paddy Meade.

TAPESTRY Site Visit (Teams Advancing Patient Experience: Strengthening Quality), McMaster University (Hamilton, Ontario), organized with support/participation from David Price and Melissa Watson (McMaster University); attended by Ernie Avilla, Tracy Carr, Lisa Dolovich, Dale Guenter, Doug Oliver, Cathy Risdon, and Alix Stosic (McMaster University).

Roundtable Discussions

The Panel would also like to thank the experts who contributed to the Panel’s many special roundtable discussions:

Meeting with the National First Nations Health Technicians Network, Assembly of First Nations (Winnipeg), organized with support/participation of Sonia Isaac-Mann and Erin Tomkins of the Assembly of First Nations; attended by Ardell Cochrane (Assembly of Manitoba Chiefs), Michelle Degroot (BC First Nations Health Authority), Tracy Antone (Chiefs of Ontario), Nadine McRee (Confederacy of Treaty 6 First Nations), Lori Duncan (Council of Yukon First Nations), Roxanne Woodward (Dene First Nations), Kyle Prettyshield (Federation of Saskatchewan Indian Nations), Rosanne Sark (Mi’kmaq Confederacy of PEI), Sophie Picard (Quebec and Labrador Health and Social Services Commission), Carolynn Small Legs (Treaty 7 Management Corporation), Kristopher Janvier (Treaty 8 First Nations), Peter Birney (Union of New Brunswick Indians), and Sally Johnson (Union of Nova Scotia Indians).

Montreal Roundtable on Healthcare Innovation (Montreal, Quebec), organized with support/participation of Jean- Louis Denis of the École nationale d›administration publique and Karine Guertin of the Université de Montréal; attended by Johanne Salvail (Hôpital Sacré-Coeur), Hélène Boisjoly, Damien Contandriopoulos, Vincent Dumez, Johanne Goudreau, Yves Joanette, Kelley Kilpatrick, Caroline Larue, Marie-Pascale Pomey, Catherine Régis, and Cara Tannenbaum (Université de Montréal), Mylaine Breton (Université de Sherbrooke), and Christine Loignon (Université de Sherbrooke).

Meeting with La Table des Soins Infirmiers du Réseau Universitaire Intégré de Santé, University of Montreal (Montreal, Quebec) organized with support from the Faculty of Nursing Sciences at the the Université de Montréal; attended by Karine Bouchard, Chantal Cara, Manouche Casimir, René DesCôteaux, Steve Desjardins, Sylvie Dubois,

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Marcela Ferrada-Videla, Annie-Claude Forget, Lucie Gagnon, Julie Gagnon, Raynald Gareau, Claudel Guillemette, Karine Houle, Jocelyne Lacroix, Carole Paquin, Mme Roberge, Marielle Roy, Johanne Salvail, Marie-Josée Simard, Sylvie St-Pierre, Jean-Sébastien Turcotte.

Best Brains Exchange on Precision and Personalized Medicine (Ottawa), organized with support/participation from Alan Bernstein of the Canadian Institute for Advanced Research (meeting moderator) and Meghan Baker and Alison Bourgon of the Canadian Institutes of Health Research; attended by Sohrab Shah (British Columbia Cancer Agency), Jane Aubin, Helen Loughrey, Michel Perron, Etienne Richer, Rachel Syme, and Robyn Tamblyn (Canadian Institutes for Health Research), James Kennedy (Centre for Addiction and Mental Health), Kym Boycott and Alex Mackenzie (CHEO Research Institute), David Levine (D.L. Strategic Consulting), Ruslan Dorfman (GeneYouIn), Cindy Bell (Genome Canada), Guy Rouleau (McGill University), Tom Hudson (Ontario Institute for Cancer Research, University of Toronto), Duncan Stewart (Ottawa Hospital Research Institute), Timothy Caulfield (University of Alberta), Peter Liu (University of Ottawa Heart Institute), Mansoor Husain and Sachdev Sidhu (University of Toronto), Jean-Claude Tardif (the Université de Montréal), and Richard Kim (London Health Sciences Centre, Western University).

Tax Incentives Roundtable (Ottawa), organized with support/participation of Herb Emery and Lindsay Heighington of the University of Calgary; attended by Chris Kuchciak (Canadian Institute for Health Information), Stephen Frank (Canadian Life and Health Insurance Association), Owen Adams (Canadian Medical Association), Marc-André Gagnon (Carleton University), Louis Thériault (Conference Board of Canada), Keith Horner (formerly of the federal Department of Finance), Helen McElroy (Health Canada), Henri-Paul Rousseau (Power Corporation of Canada), Claudia Sanmartin (Statistics Canada), and Jennifer Zwicker (University of Calgary).

CEO Roundtable (Toronto), organized with support/participation from Hon. John Manley, Susan Scotti, and Joe Blomeley of the Canadian Council of Chief Executives; attended by Mary Deacon (Bell Mental Health Initiative), Robert Amyot (CAE Healthcare), Hitesh Seth (CGI), Elyse Allan (GE Canada), Barry Burk (IBM Canada Inc.), Robert Chant (Loblaw Companies Inc.), David Simmonds (McKesson Canada), Ghislain Boudreau (Pfizer Canada Inc.), Jeff Leger (Shoppers Drug Mart), James Graziadei (Siemens Canada Inc.), Robert Hardt (Siemens Canada Inc.), and Josh Blair (Telus Health and Telus International).

Industry/Government Roundtable (Toronto), organized with support/participation of Jasmine Brown, Hanna Price, and John Sproule of the Institute of Health Economics; attended by Geoff Fernie (Apnea Dx), Heather Chalmers (GE Canada), Susan Fitzpatrick (Ministry of Health & Long Term Care, Government of Ontario), Jeff Ruby (Newtopia), Sandy Schwenger (PatientCare Solutions and M-Health Solutions), Andrea Englert-Rygus (Plexxus), William Falk (PwC), Shirlee Sharkey (Saint Elizabeth), Joshua Liu (Seamless MD), Adalsteinn Brown (University of Toronto), and David O’Neil (Zimmer).

International Summit on Healthcare Innovation and High-Performing Health Systems (Toronto), organized with support/participation of Terrence Sullivan (meeting moderator) and Marcella Sholdice (note-taker) (Terrence Sullivan and Associates); Zayna Khayat of MaRS; Erik Landriault of the Royal Danish Consulate General (Toronto); and Jeremy Veillard of the Canadian Institute for Health Information; attended by Janet Davidson (Alberta Health, Government of Alberta), Anthony Sherbon (Australian Independent Hospital Pricing Authority), Andrew Wiesenthal (formerly of the Permanente Federation), Bruce Cooper (Department of Health and Community Services, Government of Newfoundland & Labrador), Paddy Meade (Department of Health and Social Services, Government of Yukon), Eleanor J. Hubbard (Department of Health and Wellness, Government of Nova Scotia), Michael Mayne (Department of Health and Wellness, Government of Prince Edward Island), Tom Maston (Department of Health, Government of New Brunswick), Colleen Stockley (Department of Health, Government of Nunavut), Paul Glover (Health Canada), Molly Porter (Kaiser Permanente International), Karen Herd (Manitoba Health, Government of Manitoba), Joan Hentze (Ministry of Foreign Affairs of Denmark), Bob Bell (Ministry of Health & Long Term Care, Government of Ontario), Stephen Brown (Ministry of Health, Government of British Columbia), Niek Klazinga (Organization for Economic Cooperation and Development), and Martin Marshall (University College of London).

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Patient Roundtable (Toronto), organized with support from Mary Pat MacKinnon, Shanna Buzza, and Tristan Eclarin of Ascentum Inc.; Andrew Macleod of the Change Foundation; Maria Judd, Jessie Checkley, and Paula Kourny of the Canadian Foundation for Healthcare Improvement; Carol Fancott and Ross Baker of the University of Toronto; Patients Canada; and Angela Morin; attended by Judy Berger, Brian Clark, Mario Dicarlo, Anya Humphrey, Linda Jones, Maciej Karpinski, Donna Lalonde, Sweeta Malhortra, Derek Porrity, and Nancy Xia.

Youth Engagement Sessions (Ottawa and virtual), organized with support from Sharif Mahdy of the Students Commission of Canada and Michel Blanchard and Roberta Acason of the Healthy Environments and Consumer Safety Branch, Health Canada; attended by members of Health Canada’s National Youth Leadership Team on Tobacco Control and the Centre for Addiction and Mental Health’s National Youth Advisory Committee.

Interviews

The Panel would like to thank the following individuals for taking the time to participate in key informant interviews with members of the Panel and the Healthcare Innovation Secretariat: David Bates (Brigham and Women’s Hospital), Jennifer Zelmer (Canada Health Infoway), Andrew Wiesenthal (Deloitte), Christine Couture (Government of Alberta), Vijay Bashyakarla (Government of Nova Scotia), David Brook and Peter Singer (Grand Challenges), Carrine McIsaac (Health Outcomes Worldwide), Dianne Caldbick and Shannon Glenn (Industry Canada), Kenneth Kizer (Institute for Population Health Improvement, UC Davis Health System), Eddy Nason (Institute on Governance), Chris Ham (King’s Fund), Alison Blair and Karen Moore (Ministry of Health & Long Term Care, Government of Ontario), Renata Osika (National Health of Provincial Health Research Organizations), Jeremy Theal (North York General Hospital), Joe Selby (Patient-Centered Outcomes Research Institute), Michael Decter, Sholom Glouberman and Francesca Grosso (Patients Canada), Deborah Gordon-El-Bihbety (Research Canada), Poul Erik Hansen (Rosklide University), Daniel Forslund (Stockholm County Council), Morten Elbaek Petersen (Sundhed), David Blumenthal, Donald Moulds, and Robin Osborn (The Commonwealth Fund), Phillip Bazel (University of Calgary), Charles Friedman (University of Michigan), Lori Turik (University of Western Ontario, Ivey Business School), Sameh El-Saharty (), and the late Brenda Zimmerman (York University).

Stakeholder Submissions

The Panel would like to thank the 200+ individuals and organizations who submitted formal input via the Panel’s online stakeholder consultation process: Accreditation Canada, Albert Friesen, Alberta Health Services, Alzheimer Society of Canada, Arthritis Alliance of Canada, Assembly of First Nations, Association of Faculties of Medicine Canada, BC Alliance on TeleHealth Policy and Research, BC Mental Health & Substance Use Services, BIOTECanada, [BIOTECanada, Canada’s Research-Based Pharmaceutical Companies Colleges and Institutes of Canada, HealthCareCAN, Health Charities Coalition of Canada, MEDEC and Research Canada], Bone & Joint Canada, BRYTECH Inc., Canada’s Research- Based Pharmaceutical Companies, Canadian Advanced Technology Alliance, Canadian Agency for Drugs and Technologies in Health, Canadian AIDS Society, Canadian Association of Advanced Practice Nurses, Canadian Association of Medical Radiation Technologists, Canadian Association of Occupational Therapists, Canadian Association of Optometrists, Canadian Association of Paediatric Health Centres, Canadian Association of Retired Persons, Canadian Association of Schools of Nursing, Canadian Association of the Deaf, Canadian Blood Services, Canadian Breast Cancer Foundation, Canadian Cancer Research Alliance, Canadian Cancer Society, Canadian Chiropractic Association, Canadian Counselling and Association, Canadian Dental Association, Canadian Dental Hygienists Association, Canadian Doctors for Medicare, Canadian Federation of Nurses Unions, Canadian Foundation for Healthcare Improvement, Canadian Generic Pharmaceutical Association, Canadian Health Coalition, Canadian Health Food Association, Canadian Home Care Association, Canadian Hospice Palliative Care Association, Canadian Institute for Health Information, Canadian Institute of Actuaries, Canadian Malnutrition Task Force, Canadian Therapist Alliance, Canadian Medical Association, Canadian Men’s Health Foundation, Canadian Mental Health Association, Canadian Nurses Association, Canadian Nurses Foundation, [Canadian Pain Society, Canadian Pain Coalition, Chronic Pain Association

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of Canada, Pain BC and ILC Foundation], Canadian Partnership Against Cancer, Canadian Patient Safety Institute, Canadian Pharmacists Association, Canadian Physiotherapy Association, Canadian Psychiatric Association, Canadian Psychological Association, Canadian Society for Medical Laboratory Science, Canadian Union of Public Employees, Canadian Virtual Hospice, Canadian Working Group on HIV and Rehabilitation, Carolyn McGregor, Choosing Wisely Canada, CNIB, Cochrane Canada, Collaborative Mental Health Care Network, Colleges and Institutes Canada, Community Health Nurses of Canada, Community Palliative Care Network, Concordia University, Congress of Union Retirees of Canada, CONNECT Communities Ltd., Consortium national de formation en santé, Council of Canadians, Craig Louie, David Tilson, Dieticians of Canada, [John Campbell, Sanjay Rao, John Moore and Dana Pulsifer], Dan Smyth, David Gotlib and Jose Silveira, David Ostrow, Gregor Reid, Ivy Lynn Bourgeault, James Lunney, Janusz Kaczorowski, Joachim Sehrbrock and Theo DeGagne, Murray Enns, Olubankole Obikoya, Patrick Gullane, Richard Riopelle, Stuart MacLeod, Tom Marrie and Brian Postl, Veronica Asgary-Eden, Vivian Rambihar, Francesca Grosso and Michael Decter, Genome Canada, GS1 Canada, Health Care Co-operatives Federation of Canada, Health Charities Coalition of Canada, Health Innovates Ottawa, HealthCareCAN, Heart & Stroke Foundation, Heather Hadjistavropoulos, Hospice Muskoka, Information Technology Association of Canada, Canada Health Infoway, Injury Prevention Centre, Institute for Clinical Evaluative Sciences, Institute of Health Economics, International Eating Disorders Action, Invicta Health Inc., Itarget, IVEY International Centre for Health Innovation, Janssen Inc., [Jim Whitlock, Patrick Sullivan and Antonia Palmer], John Have, KIDSCAN, Kingston Family Health Team, Lumira Capital, MaRS Health, MEDEC, Medical Devices Commercialization Centre, Michael Wolfson, Ministère de la Santé et des Services sociaux (Quebec), Montfort Hospital, National Alliance of Provincial Health Organizations, National Initiative for the Care of the Elderly, Neurological Health Charities Canada, NEXJ Systems Inc., Nuvitik, OCAD University, Patients Canada, Patients for Patients Safety Canada, Réjean Hébert, Prognostic and Therapeutic Harmonization, Providence Health, Registered Nurses Association of Ontario, Research Canada, Rick Hansen Institute, Roche Diagnostics, Royal College of Physicians and Surgeons of Canada, Schizophrenia Society of Ontario, South Medic, Southlake Regional Health Centre, Speech-Language & Audiology Canada, Stem Cell Network, Stemcell Technologies, Stretch It Physiotherapy Services, Strongest Families Institute, TAPESTRY, Tele-Link Mental Health Program, TELUS Health Solutions, Terry Fox Research Institute, The Bear Clinic, The Centre for Drug Research and Development (CDRD) and CDRD Ventures Inc., The Change Foundation, The College of Family Physicians of Canada, [The Community Against Preventable Injuries, Prevention Centre, The BC Injury Research and Prevention Unit and Parachute], The ILC Foundation, The Kidney Foundation of Canada, the Canadian Society of Nephrology and the Canadian Society of Transplantation, Therapeutic Touch Networks of Canada, TransForm Shared Service Organization, Vancouver Coastal Health, Victoria Health Cooperative, and XAHIVE.

Finally, the Panel would like to extend its utmost gratitude to the 260 members of the public who took the time to participate in the Panel’s online public consultation process.

Note: Given the breadth and diversity of the Panel’s activities and the large number of contributing individuals and organizations, the above list may contain errors of omission or attribution. The Panel regrets any such errors and apologizes to anyone who may have been inadvertently missed or otherwise incorrectly acknowledged.

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Appendix 3: List of Commissioned Research and Analysis

The Panel wishes to recognize the following individuals and organizations for their contributions to the Panel’s research and analysis activities.

Regional and National Stakeholder Impact of Innovation on Consultations – Synthesis Report expenditure growth and options for Ascentum Inc. implementation for Canada Don Husereau, Institute of Health Economics Summary Report of the Advisory Panel on Healthcare Innovation’s Industry/Government Collaboration Patient Roundtable in Health Innovation Roundtable Ascentum Inc. – Summary Report and Recommendations Patient Engagement: Catalyzing Institute of Health Economics Improvement and Innovation in Canadian Healthcare An Overview of Canada’s Health G. Ross Baker and Carol Fancott of the University of Toronto Innovation Architecture and Maria Judd, Elina Farmanova, and Christine Maika of Ivey Centre on Health Innovation, Western University the Canadian Foundation for Healthcare Improvement Youth Perspectives on Healthcare Tax-Assisted Approaches for Helping Innovation in Canada – Summary Canadians Meet Out of Pocket Report Healthcare Costs The Students Commission of Canada J.C. Herbert Emery, University of Calgary International Summit on Healthcare Real vs . Alleged Privacy Barriers to Innovation and High-Performing Healthcare Innovation in Canada David Flaherty, David H. Flaherty Inc. Health Systems: Lessons for Canada – Final Summary Report Review of Leading Provincial and Terrence Sullivan and Marcella Sholdice, Terrence Sullivan and Associates Territorial Healthcare Innovations in Canada Bundled payments: Can they help Diane Gagnon, University of Ottawa Canadian Health Systems? Jason Sutherland and Erik Hellsten, University of British Montreal Roundtable on Healthcare Columbia Innovation – Summary Report Karine Guertin, University of Montreal

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278 Canadian Institute for Health Information (CIHI). National Health Expenditure Trends, 1975 to 2014. Ottawa: CIHI; 2014. Available from http://www.cihi.ca/CIHI-ext-portal/pdf/ internet/nhex_2014_report_en

279 Sanmartin C, Hennessy D, Lu Y, Law MR. Trends in out-of- pocket health care expenditures in Canada, by household income, 1997 to 2009. Ottawa: Statistics Canada; 2014 April 16. Available from: http://www.statcan.gc.ca/pub/82- 003-x/2014004/article/11924-eng.htm

280 Nelson PJ. A primer on how employment-based health incentives (and tax code) distort the healthcare market. Golden Valley (United States): Centre of the American Experiment; 2007. Available from: http://www.americanexperiment.org/ sites/default/files/article_pdf/0711nelson.pdf; Buchmueller TC, Monheit AC. Employer-sponsored health insurance and the promise of health insurance reform. Inquiry. 2009 Summer; 46(2):187-202. Olson CA. Do workers accept lower wages in exchange for health benefits? Journal of Labor Economics. 2002; 20(2): S91-S114. Monheit AC, Vistness JP. Health insurance availability at the workplace: how important are worker preferences? The Journal of Human Resources. 1999. 34(4): 770-85.

281 Emery H. Advisory Panel on Healthcare Innovation Commissioned Research: Tax-assisted approaches for helping Canadians meet out of pocket health care costs. Ottawa: Health Canada; 2015.

282 Private Health Services Plan Premiums [Internet]. Ottawa: Canada Revenue Agency. Available from: http://www.cra-arc. gc.ca/tx/bsnss/tpcs/pyrll/bnfts/hlth/prvt-eng.html; Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.), 118.2(2)(q)

283 Based on calculations provided by Philip Bazel, researcher from the University of Calgary.

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